Introducing Qstream’s Microlearning Course Library: Explore our collection of ready-to-use courses on a broad range of topics today!   Start Browsing >

< Library Home

Financial Services

Common financial services include payment processing, money management, credit cards, savings accounts, and mortgages. Learn about some of these financial services with this starter Qstream microlearning course.

Category: Compliance

Industry: Finance

Questions: 5

Share:

Content Preview

Financial Services

Navigate through the Qstream questions below to preview. Each challenge is designed following Qstream’s best practices for maximum knowledge reinforcement and engagement. This Qstream is free for clients to use as a starting point.

1. Traditional IRA Distributions >
2. Regulation T Governance >
3. Potential Red Flag >
4. Understanding Trades >
5. Handling Customer Complaints >

Follow the interactions on each screen to answer Qstream questions as a Participant.

At what age must a customer begin taking required minimum distributions from a traditional IRA?

Answer explanation:
You cannot keep retirement funds in your account indefinitely. You generally must start taking withdrawals from your IRA or retirement plan account when you reach age 701⁄2. Roth IRAs do not require withdrawals until after the death of the owner.

Your required minimum distribution is the minimum amount you must withdraw from your account each year.
• You can withdraw more than the minimum required amount.
• Your withdrawals will be included in your taxable income except for any part that was taxed before or that can be received tax-free (such as qualified distributions from designated Roth accounts).

Which entity governs Regulation T?

Answer explanation:
Federal Reserve Board Regulation T (also referred to as Reg T) is 12 CFR §220 - Code of Federal Regulations, Title 12, Chapter II, Subchapter A, Part 220 (Credit by Brokers and Dealers).

Regulation T governs the extension of credit by securities brokers and dealers in the United States. Its best-known function is the control of margin requirements for stocks bought on margin. The initial margin requirement for such margin stock purchases is 50% and has been since 1974, but Regulation T gives the Federal Reserve the authority to change that percentage.

Raising the margin requirement ostensibly reduces risk in the financial system by reducing the potential leverage and total buying power of investors. Conversely, lowering the margin requirement ostensibly increases systemic risk by expanding the buying power and leverage available to investors. Since 1974 the Federal Reserve has not deemed it necessary to adjust the margin requirement, despite periodic extremes of price volatility in the equities markets.

Which of the following requests made by a customer concerning his statements is a potential red flag?

Answer explanation:
Every few minutes worldwide someone falls prey to identity theft. Identity thieves may drain accounts, damaged credit, and even put medical treatment at risk. The cost to the business can be staggering, too.

The Red Flags Rule requires many banks and financial institutions to implement a written identity theft prevention program designed to detect the “red flags” of identity theft in their day-to-day operations, take steps to prevent the crime, and mitigate its damage. The bottom line is that a program can help spot suspicious patterns and prevent the costly consequences of identity theft.

The brokerage industry acronym DK (Don't Know) applies to which one of the following?

Answer explanation:
Trade Comparison is the matching process through which the two parties to a brokerage transaction – the buy side and the sell side – agree on the key components of the securities transaction.

The key components of a securities trade are:
1. Side – Buy or Sell
2. Security – the specific issuer and financial instrument traded
3. Contra Broker – the firm with which the trade was executed
4. Quantity – the exact number of shares, bonds, options, etc. traded 5. Price – the agreed-upon execution price of the trade
5. Accrued Interest – the appropriate amount (BONDS ONLY)

At such time that both parties – buy side and sell side – agree on all key trade components, a trade comparison, or contract results. A trade comparison or contract creates a legally binding securities transaction.

If the contra broker does not agree with the specific trade details on the trade Comp, the contra broker will "DK" the Comp. DK is a brokerage industry acronym that stands for "Don’t Know". Upon receiving a DK notice, the P&S Department must refer the item back to the originating trader for investigation and resolution.

A firm receives a written complaint from a customer of misappropriation of funds and securities in the customer's account. The complaint should be reported to which one of the following?

Answer explanation:
Independent regulation plays a critical role in America’s financial system—by enforcing high ethical standards, bringing the necessary resources and expertise to regulation, and enhancing investor safeguards and market integrity —all at no cost to taxpayers.

• Every investor in America relies on one thing: fair financial markets. That's why FINRA works every day to ensure that:
• Every investor receives the basic protections they deserve;
• Anyone who sells a securities product has been tested, qualified, and licensed;
• Every securities product advertisement used is truthful, and not misleading;
• Any securities product sold to an investor is suitable for that investor's needs, and Investors receive complete disclosure about the investment product before purchase.

Last year, through their aggressive vigilance, FINRA brought 1,535 disciplinary actions against registered brokers and firms. They levied more than $65 million in fines. And ordered more than $9.5 million in restitution to harm investors. They also referred 660 fraud and insider trading cases to the SEC and other agencies for litigation and/or prosecution.

At what age must a customer begin taking required minimum distributions from a traditional IRA?

Answer explanation:
You cannot keep retirement funds in your account indefinitely. You generally must start taking withdrawals from your IRA or retirement plan account when you reach age 701⁄2. Roth IRAs do not require withdrawals until after the death of the owner.

Your required minimum distribution is the minimum amount you must withdraw from your account each year.
• You can withdraw more than the minimum required amount.
• Your withdrawals will be included in your taxable income except for any part that was taxed before or that can be received tax-free (such as qualified distributions from designated Roth accounts).

Which entity governs Regulation T?

Answer explanation:
Federal Reserve Board Regulation T (also referred to as Reg T) is 12 CFR §220 - Code of Federal Regulations, Title 12, Chapter II, Subchapter A, Part 220 (Credit by Brokers and Dealers).

Regulation T governs the extension of credit by securities brokers and dealers in the United States. Its best-known function is the control of margin requirements for stocks bought on margin. The initial margin requirement for such margin stock purchases is 50% and has been since 1974, but Regulation T gives the Federal Reserve the authority to change that percentage.

Raising the margin requirement ostensibly reduces risk in the financial system by reducing the potential leverage and total buying power of investors. Conversely, lowering the margin requirement ostensibly increases systemic risk by expanding the buying power and leverage available to investors. Since 1974 the Federal Reserve has not deemed it necessary to adjust the margin requirement, despite periodic extremes of price volatility in the equities markets.

Which of the following requests made by a customer concerning his statements is a potential red flag?

Answer explanation:
Every few minutes worldwide someone falls prey to identity theft. Identity thieves may drain accounts, damaged credit, and even put medical treatment at risk. The cost to the business can be staggering, too.

The Red Flags Rule requires many banks and financial institutions to implement a written identity theft prevention program designed to detect the “red flags” of identity theft in their day-to-day operations, take steps to prevent the crime, and mitigate its damage. The bottom line is that a program can help spot suspicious patterns and prevent the costly consequences of identity theft.

The brokerage industry acronym DK (Don't Know) applies to which one of the following?

Answer explanation:
Trade Comparison is the matching process through which the two parties to a brokerage transaction – the buy side and the sell side – agree on the key components of the securities transaction.

The key components of a securities trade are:
1. Side – Buy or Sell
2. Security – the specific issuer and financial instrument traded
3. Contra Broker – the firm with which the trade was executed
4. Quantity – the exact number of shares, bonds, options, etc. traded 5. Price – the agreed-upon execution price of the trade
5. Accrued Interest – the appropriate amount (BONDS ONLY)

At such time that both parties – buy side and sell side – agree on all key trade components, a trade comparison, or contract results. A trade comparison or contract creates a legally binding securities transaction.

If the contra broker does not agree with the specific trade details on the trade Comp, the contra broker will "DK" the Comp. DK is a brokerage industry acronym that stands for "Don’t Know". Upon receiving a DK notice, the P&S Department must refer the item back to the originating trader for investigation and resolution.

A firm receives a written complaint from a customer of misappropriation of funds and securities in the customer's account. The complaint should be reported to which one of the following?

Answer explanation:
Independent regulation plays a critical role in America’s financial system—by enforcing high ethical standards, bringing the necessary resources and expertise to regulation, and enhancing investor safeguards and market integrity —all at no cost to taxpayers.

• Every investor in America relies on one thing: fair financial markets. That's why FINRA works every day to ensure that:
• Every investor receives the basic protections they deserve;
• Anyone who sells a securities product has been tested, qualified, and licensed;
• Every securities product advertisement used is truthful, and not misleading;
• Any securities product sold to an investor is suitable for that investor's needs, and Investors receive complete disclosure about the investment product before purchase.

Last year, through their aggressive vigilance, FINRA brought 1,535 disciplinary actions against registered brokers and firms. They levied more than $65 million in fines. And ordered more than $9.5 million in restitution to harm investors. They also referred 660 fraud and insider trading cases to the SEC and other agencies for litigation and/or prosecution.

Not a Qstream client but interested in this content and learning more?

Schedule a Call with Qstream

Looking for more questions?
We have the answers.