Series 99 Customer Account Handling & Documentation 5 — Questions and Answers
Question 1: Which of the following transactions would trigger a Currency Transaction Report (CTR) filing?
- A $5,000 wire transfer
- A $9,500 cash deposit
- A $10,500 cash deposit (Correct answer)
- A $50,000 securities purchase paid by check
Correct answer: A $10,500 cash deposit
A CTR must be filed for any cash transaction exceeding $10,000; a $10,500 cash deposit triggers this requirement.
Question 2: A customer who is a non-resident alien must provide which IRS form to certify their foreign status and claim treaty benefits?
- W-9
- W-8BEN (Correct answer)
- 1099-B
- SS-4
Correct answer: W-8BEN
Non-resident aliens provide Form W-8BEN to certify foreign status and claim applicable tax treaty benefits.
Question 3: A customer places an order while the firm is reviewing a suspicious activity report (SAR) related to the account. Operations should:
- Freeze the account and refuse the order
- Process the order normally while keeping the SAR confidential (Correct answer)
- Notify the customer that a SAR has been filed
- Escalate to FINRA before processing
Correct answer: Process the order normally while keeping the SAR confidential
SAR filings are confidential; tipping off the customer is prohibited, so the order should be processed normally unless a freeze has been legally ordered.
Question 4: Under the SEC's Customer Protection Rule (Rule 15c3-3), a broker-dealer must maintain customer funds:
- In the firm's general operating account
- In a special reserve bank account separate from firm assets (Correct answer)
- In a money market fund approved by the firm's board
- In a Federal Reserve member bank only
Correct answer: In a special reserve bank account separate from firm assets
Rule 15c3-3 requires broker-dealers to hold customer funds in a dedicated Special Reserve Account to protect them from firm insolvency.
Question 5: A customer submits a power of attorney (POA) granting a family member trading authority. Operations must:
- Accept it only if it is a 'durable' POA notarized within the past 30 days
- Review and accept the POA per firm procedures, then document it in the account record (Correct answer)
- Reject it unless the family member is also a FINRA-registered person
- Forward it directly to the SEC for approval
Correct answer: Review and accept the POA per firm procedures, then document it in the account record
Operations must review the POA per firm procedures and document the third-party authority in the customer's account record.
Question 6: A customer's account is flagged for potential elder financial exploitation. Under FINRA Rule 2165, the firm may:
- Permanently close the account
- Temporarily hold a disbursement of funds for up to 25 business days (Correct answer)
- Immediately report to local law enforcement without notifying the customer
- Transfer assets to the Trusted Contact Person
Correct answer: Temporarily hold a disbursement of funds for up to 25 business days
FINRA Rule 2165 permits firms to place a temporary hold on disbursements of up to 25 business days when financial exploitation of a senior is suspected.
Question 7: When a customer account is transferred via ACATS, the receiving firm must validate the transfer instructions within:
- 1 business day
- 3 business days (Correct answer)
- 5 business days
- 10 business days
Correct answer: 3 business days
Under ACATS rules, the receiving firm must validate transfer instructions within 3 business days of receipt.
Series 99 Customer Account Handling & Documentation 5
Which of the following transactions would trigger a Currency Transaction Report (CTR) filing?