Securities glossary

A state-sponsored tax-advantaged account for eligible people with disabilities, providing tax-free qualified-disability-expense withdrawals.

Also called: 529A account

See also: 529 plan

Study this card Source: IRS ABLE Accounts - Tax Benefit for People with Disabilities - ABLE Act overview

A correction or reassignment of an order's account identity requiring designated principal approval and written documentation.

See also: Customer account record

Study this card Source: FINRA Rule 4515 - Rule text

A fund charge for maintaining an account, sometimes applied when its value falls below a stated minimum.

See also: Expense ratio

Study this card Source: SEC Mutual Fund and ETF Fees and Expenses Investor Bulletin - Account Fee

90-day restriction after freeriding: the investor may still buy, but must pay in full for each purchase on the trade date.

Also called: 90-day freeze

See also: Freeriding

Study this card Source: SEC Investor.gov glossary: Freeriding

On validation of a whole-account transfer, the carrying firm restricts new orders and cancels open orders, with a narrow options exception.

See also: Transfer instruction form

Study this card Source: FINRA Rule 11870 - (d)(1)

A purchaser meeting specified financial, institutional, professional, or other criteria under Regulation D.

See also: Rule 506(c) offering

Study this card Source: 17 CFR 230.501(a)

An individual qualification route requiring net worth above $1 million, alone or with a spouse or equivalent, excluding the main home.

See also: Accredited investor

Study this card Source: 17 CFR 230.501(a)(5)

A designated certification or credential held in good standing that qualifies a natural person without a wealth test.

See also: Accredited investor

Study this card Source: 17 CFR 230.501(a)(10)

The period when annuity contributions and investment results build account value before scheduled income begins.

See also: Annuitization

Study this card Source: SEC Investor.gov Variable Annuities - Accumulation phase

A fund whose adviser selects investments to pursue its objectives rather than simply track an index.

See also: Index fund

Study this card Source: SEC Investor.gov Mutual Funds - Common investing strategies

Debt issued or guaranteed by a federal agency or a government-sponsored enterprise; their government backing differs.

See also: Treasury bond

Study this card Source: FINRA Bonds - Glossary: Convertible Bond; Asset-Backed Securities; Agency Security

A trade in which a broker acts on behalf of a customer or another party rather than for its own account.

See also: Principal transaction

Study this card Source: SEC 17 CFR 240.10b-10 - (a)(2)

Firm-enabled access for an individual to edit a draft Form U4 in FinPro Gateway without authority to submit it to regulators.

See also: Form U4

Study this card Source: FINRA Form U4 - Allow Rep Edits

Trading system that meets the definition of an exchange but registers as a broker-dealer instead of as an exchange.

Also called: ATS

See also: Broker, Dealer

Study this card Source: SEC Investor.gov: Market Participants - Alternative Trading Systems

A U.S.-traded receipt representing one or more foreign shares, or a fraction of a foreign share.

Also called: ADR

See also: Common stock

Study this card Source: SEC Investor.gov American Depositary Receipts - Definition

A contract exercisable at any time from purchase through expiration.

See also: European-style option

Study this card Source: FINRA Options - Glossary: American-Style Contract; European-Style Contract; Covered Call; Options by Underlying Asset

The designated associated person responsible for implementing and monitoring the firm's day-to-day AML controls.

Also called: AML officer

See also: Anti-money laundering program

Study this card Source: FINRA Rule 3310 - (d)

Converting contract value into scheduled income under a selected payout option, such as lifetime payments.

See also: Accumulation phase

Study this card Source: SEC Investor.gov Variable Annuities - Payout phase

Postponing federal tax on contract investment gains until a withdrawal, income payment, or taxable death benefit distribution.

See also: Variable annuity

Study this card Source: SEC Investor.gov Variable Annuities - Tax consequences

Written controls designed to achieve and monitor Bank Secrecy Act compliance, with written senior-management approval.

Also called: AML program

See also: AML compliance officer

Study this card Source: FINRA Rule 3310 - Introductory paragraph

The firm's pre-application inquiry into an applicant's character, business reputation, qualifications and experience.

See also: Form U4 verification

Study this card Source: FINRA Rule 3110(e), first paragraph

A formal dispute process in which neutral arbitrators review the case and issue a generally final, binding decision.

See also: Mediation, Arbitration award

Study this card Source: FINRA Overview of Arbitration and Mediation - Arbitration

The arbitrators' decision resolving a dispute, generally binding with only limited grounds for court review.

See also: Arbitration

Study this card Source: FINRA Rule 2268 - (a)(2)

Dividing a portfolio among asset categories, such as stocks, bonds, and cash, to fit an investor's goals and risk capacity.

See also: Diversification

Study this card Source: SEC Beginners Guide to Asset Allocation - Asset Allocation 101

Debt backed by a pool of assets, such as loans or receivables.

Also called: ABS

See also: Mortgage-backed security

Study this card Source: FINRA Bonds - Glossary: Convertible Bond; Asset-Backed Securities; Agency Security

A contract whose strike price equals the current underlying stock price.

Also called: ATM

See also: Strike price

Study this card Source: SEC Introduction to Options Investor Bulletin - Basic Options Terminology

An individual permitted to transact for an entity customer, whose authority the firm must understand and document.

See also: Customer account record

Study this card Source: FINRA Rule 4512 - (a)(1)(E); FINRA Rule 2090

A financial institution with an ETF agreement allowing it to create or redeem large blocks of shares directly with the fund.

Also called: AP

See also: Exchange-traded fund

Study this card Source: SEC Updated Investor Bulletin: Exchange-Traded Funds - How do ETFs work

The system used for automated broker-to-broker transfers of customer securities-account assets.

Also called: ACATS

See also: Nontransferable asset

Study this card Source: FINRA Rule 11870 - (a)-(b)

A standardized annualized measure of investment performance over a specified period, used in required fund-ad comparisons.

Also called: AATR

See also: SEC standardized yield

Study this card Source: 17 CFR 230.482(d)(3)

BEA's international transactions accounts: trade, income and investment flows between U.S. residents and residents of other countries.

Also called: International transactions accounts

See also: Gross domestic product

Study this card Source: BEA: International Transactions

Financial statement showing what a company owns and owes at a point in time: assets equal liabilities plus shareholders' equity.

Also called: Statement of financial position

See also: Income statement, Working capital

Study this card Source: SEC Beginners' Guide to Financial Statements

Clear identification and practical physical separation of brokerage services from a financial institution's deposit-taking activities.

See also: Bank-site securities disclosure

Study this card Source: FINRA Rule 3160(a)(1)

Notice that investments are not FDIC insured, are not bank obligations or guarantees, and can lose value.

See also: Networking arrangement

Study this card Source: FINRA Rule 3160(a)(3)-(4)

Agency arrangement in which the underwriter sells what it can and does not commit to buy the unsold securities.

Also called: Agency underwriting

See also: Firm commitment underwriting

Study this card Source: 17 CFR 229.508(a), Instruction

Using reasonable diligence to find the best market and obtain a price as favorable as possible under prevailing conditions.

See also: Interpositioning

Study this card Source: FINRA Rule 5310 - (a)(1)

Large trade that can move a security's price; FINRA notes even a trade under 10,000 shares could qualify for front-running purposes.

Also called: Block trade

See also: Front running

Study this card Source: FINRA Rule 5270, Supplementary Material .03

Shares of a large, established company with a strong operating history, generally paying dividends.

See also: Common stock

Study this card Source: SEC Investor.gov Stocks - What are stocks; What kinds of stocks are there

State securities laws enforced by each state's securities regulator for securities sold in that state or by people selling there.

Also called: State securities laws

See also: State securities regulator

Study this card Source: SEC Investor.gov glossary: State Securities Regulators

A pooled investment mainly holding bonds or other debt securities, with value affected by its holdings' risks.

See also: Stock fund

Study this card Source: SEC Investor.gov Mutual Funds - Types of mutual funds

The date on which the issuer's principal repayment becomes due.

Also called: Maturity date

See also: Bond principal

Study this card Source: SEC Investor.gov Bonds - What are bonds

An independent assessment of a bond fund's NAV sensitivity to market and economic changes, not a risk rating.

See also: Fund ranking

Study this card Source: FINRA Rule 2213(a)-(b)

The amount a borrower promises to repay when the debt matures.

Also called: Face value; Par value

See also: Bond maturity

Study this card Source: SEC Investor.gov Bonds - What are bonds

FINRA records with no other specified period must be kept at least six years.

Also called: Record retention

See also: Complaint record retention

Study this card Source: FINRA books and records guidance - Rule 4511

Loans between a registered person and a customer, barred unless a listed exception applies and the firm's procedures allow it.

Also called: Customer loans

See also: Improper use of customer funds

Study this card Source: FINRA Rule 3240(a)

Selling just below a discount threshold to obtain a higher sales charge, prohibited under FINRA Rule 2342.

See also: Sales charge breakpoint

Study this card Source: FINRA Rule 2342 - (a)

Person in the business of effecting securities transactions for the account of others, acting as agent.

See also: Dealer, Agency transaction

Study this card Source: Securities Exchange Act section 3(a)(4)(A), 15 USC 78c

Rule 3220's ordinary $300 annual cap per recipient for gifts related to the business of another person's employer, subject to exceptions.

See also: Gift aggregation

Study this card Source: FINRA Rule 3220(a), effective March 30, 2026

A contract giving its buyer the right to buy the underlying shares at a stated price within the permitted exercise period.

Also called: Call

See also: Put option

Study this card Source: SEC Introduction to Options Investor Bulletin - Basic Options Terminology

The required memorandum documenting an unexecuted brokerage order and its cancellation; cancellation does not erase the record.

See also: Order memorandum

Study this card Source: SEC 17 CFR 240.17a-3 - (a)(6)(i)(A)

The excess of an investment's sale proceeds over its adjusted tax basis.

See also: Capital loss, Cost basis

Study this card Source: IRS Topic 409 Capital Gains and Losses - Basis and gain or loss

A fund payment to shareholders of net gains realized from selling portfolio securities.

See also: Dividend reinvestment

Study this card Source: SEC Investor.gov Mutual Funds - How do I earn money from mutual funds

The amount by which an investment's adjusted tax basis exceeds its sale proceeds.

See also: Capital gain, Cost basis

Study this card Source: IRS Topic 409 Capital Gains and Losses - Basis and gain or loss

The possibility of losing some or all of the money invested.

Also called: Risk of principal loss

See also: Market risk

Study this card Source: FINRA Risk - What Is Risk; Managing Risk

Reg BI's duty to assess risks, rewards, costs, customer fit, and whether a series of recommendations is excessive.

See also: Regulation Best Interest

Study this card Source: SEC 17 CFR 240.15l-1 - (a)(2)(ii)

The firm currently holding the customer's securities account from which assets are to be transferred.

Also called: Delivering firm

See also: Receiving member

Study this card Source: FINRA Rule 11870 - (a)(1)

A brokerage account requiring full payment for purchases without borrowing from the broker.

See also: Margin account

Study this card Source: SEC Investor Bulletin: How to Open a Brokerage Account - Cash or margin account

Financial statement reporting a company's inflows and outflows of cash.

Also called: Statement of cash flows

See also: Income statement, Balance sheet

Study this card Source: SEC Beginners' Guide to Financial Statements

A registration status caused by unmet Regulatory Element obligations that prohibits duties requiring registration.

See also: Regulatory Element

Study this card Source: FINRA Rule 1240(a)(2)

A bank deposit held for a specified term in exchange for interest, potentially subject to an early-withdrawal penalty.

Also called: CD

See also: Money market fund

Study this card Source: SEC Investor.gov Certificates of Deposit - What are certificates of deposit

An insurer's capacity to honor its guarantees; those guarantees do not cover separate-account investment performance.

See also: Variable product liquidity disclosure

Study this card Source: FINRA Rule 2211(a)(3)

A fund share class commonly carrying a front-end sales charge, with possible discounts or waivers and lower ongoing distribution fees.

See also: Sales charge breakpoint

Study this card Source: SEC Updated Investor Bulletin: Mutual Fund Classes - Common Classes With Sales Loads

A fund share class traditionally using asset-based charges and a possible deferred sales charge rather than an initial load.

See also: Class A shares

Study this card Source: FINRA Breakpoints Disclosure Statement - Sales Charges

A fund share class commonly using higher ongoing distribution fees and a possible charge for early redemption.

See also: Class A shares

Study this card Source: SEC Updated Investor Bulletin: Mutual Fund Classes - Common Classes With Sales Loads

Self-regulatory organization that must register with the SEC; depositories such as DTC hold securities for participants.

Also called: Clearinghouse

See also: Depository Trust Company, Self-regulatory organization

Study this card Source: SEC Investor.gov: Market Participants - Clearing Agencies

Relief from FINRA registration for associated persons performing solely clerical or ministerial duties.

See also: Order transcription exception

Study this card Source: FINRA Rule 1230(a)

A pooled investment not generally required to redeem shares; publicly traded shares can trade above or below NAV.

Also called: CEF

See also: Premium to NAV, Discount to NAV

Study this card Source: SEC Investor Bulletin: Publicly Traded Closed-End Funds - How are closed-end funds different

Short-term promissory notes issued primarily by corporations to finance current transactions.

Also called: CP

See also: Treasury bill

Study this card Source: Federal Reserve About Commercial Paper - Opening paragraph

A charge for a broker's services in executing a securities transaction as agent.

See also: Agency transaction

Study this card Source: FINRA Rule 2121 - Rule text

An ownership interest usually carrying voting rights and a claim on any dividends declared.

See also: Preferred stock

Study this card Source: SEC Investor.gov Stocks - What are stocks; What kinds of stocks are there

The duty to preserve written customer complaints and related action records for at least four years under FINRA Rule 4513.

See also: Written customer complaint

Study this card Source: FINRA Rule 4513 - (a)

Reg BI's requirement for written firm policies and procedures reasonably designed to achieve compliance with the regulation.

See also: Regulation Best Interest

Study this card Source: SEC 17 CFR 240.15l-1 - (a)(2)(iv)

An interest that could incline a broker to give a recommendation influenced by something other than the customer's interests.

See also: Conflict of interest obligation

Study this card Source: SEC 17 CFR 240.15l-1 - (b)(3)

Reg BI's requirement for firm policies identifying and addressing conflicts, including mitigation or elimination when required.

See also: Conflict of interest

Study this card Source: SEC 17 CFR 240.15l-1 - (a)(2)(iii)

Penalty on a firm or supervisor who controlled an insider trader: up to the greater of $1,000,000 or three times the profit gained or loss avoided.

See also: Insider trading penalty

Study this card Source: Securities Exchange Act section 21A(a)(3), 15 USC 78u-1

Debt that can be exchanged for the same issuer's common shares on predetermined terms.

See also: Common stock, Corporate bond

Study this card Source: FINRA Bonds - Glossary: Convertible Bond; Asset-Backed Securities; Agency Security

A company debt obligation promising interest and repayment of principal; its holder is a creditor rather than an owner.

See also: Common stock

Study this card Source: SEC Investor.gov Corporate Bonds - Basic types; Bankruptcy priority

Written or electronic material for 25 or fewer retail investors in any 30-calendar-day period.

See also: Retail communication

Study this card Source: FINRA Rule 2210(a)(2)

An investment's tax starting value, generally its purchase cost, adjusted as tax rules require.

See also: Capital gain, Capital loss

Study this card Source: IRS Topic 409 Capital Gains and Losses - Basis and gain or loss

Trading costs measured against account equity; a factor FINRA lists in judging excessive trading.

See also: Excessive trading, Turnover rate

Study this card Source: FINRA Rule 2111, Supplementary Material .05(c)

Selling a call while owning the underlying shares, earning premium while giving up gains above the strike if assigned.

See also: Call option

Study this card Source: FINRA Options - Glossary: American-Style Contract; European-Style Contract; Covered Call; Options by Underlying Asset

The possibility that a borrower cannot make promised principal or interest payments.

Also called: Default risk

See also: Investment-grade bond

Study this card Source: SEC Investor.gov Municipal Bonds - Risks: Credit; Inflation; Interest rate; Liquidity

The possibility that exchange-rate movements reduce an investment's return when translated into the investor's home currency.

Also called: Exchange rate risk

See also: Political risk

Study this card Source: FINRA Bonds - Risks: Reinvestment; Currency; Glossary: Prepayment Risk

Assets a company expects to convert to cash within one year.

See also: Working capital, Balance sheet

Study this card Source: SEC Beginners' Guide to Financial Statements

The adult managing a minor's custodial assets for the beneficiary until the custodianship ends.

See also: UTMA/UGMA account

Study this card Source: FINRA Regulatory Notice 20-07 - Background and Discussion

The end of a custodian's authority when the applicable termination event occurs; continued control requires a valid basis.

See also: UTMA/UGMA account

Study this card Source: FINRA Regulatory Notice 20-07 - Background and Discussion; Supervisory Measures

Required account information, including identity, responsible personnel, acceptance, and applicable authorized-person details.

See also: Authorized account person

Study this card Source: FINRA Rule 4512 - (a)

A periodic report of securities positions, cash balances, and account activity, with instructions to report discrepancies.

See also: Trade confirmation

Study this card Source: FINRA Rule 2231 - (a)

The firm's FINRA reporting duties for specified complaints and quarterly complaint statistics, separate from retaining complaint records.

See also: Complaint record retention

Study this card Source: FINRA Rule 4530 - (a)(1)(B), (d)

Written, risk-based procedures helping a broker-dealer form a reasonable belief it knows each customer's true identity.

Also called: CIP

See also: Documentary identity verification

Study this card Source: 31 CFR 1023.220 - (a)(1)-(2)

The required identity details collected at opening, generally name, address, birth date for individuals, and an identification number.

See also: Customer identification program

Study this card Source: 31 CFR 1023.220 - (a)(2)(i)

For Regulation S-P, a continuing relationship providing financial products or services for personal, family, or household purposes.

See also: Initial privacy notice

Study this card Source: 17 CFR 248.3 - (k)(1)

The AML risk assessment developed by understanding the nature and purpose of a customer's relationship.

See also: Ongoing customer due diligence

Study this card Source: FINRA Rule 3310 - (f)(i)

A Rule 2111 duty to match a recommendation to the particular customer's investment profile.

See also: Reasonable-basis suitability

Study this card Source: FINRA Rule 2111 - Supplementary Material .05(b), .08

An unfilled trading instruction that generally expires at the end of the regular trading session in which it is entered.

See also: Good-til-canceled order

Study this card Source: SEC Understanding Order Types Investor Bulletin - Day

Person in the business of buying and selling securities for its own account, acting as principal.

See also: Broker, Principal transaction

Study this card Source: Securities Exchange Act section 3(a)(5)(A), 15 USC 78c

An unsecured bond relying on the issuer's general credit rather than a pledge of specific assets.

Also called: Unsecured bond

See also: Secured bond

Study this card Source: SEC Investor.gov Corporate Bonds - Basic types; Bankruptcy priority

A contract accumulating value before income payments begin at a later date.

See also: Immediate annuity

Study this card Source: FINRA Annuities - Immediate and deferred annuities

For declining loads, redeem load-free amounts first, then oldest purchases, unless another order produces a lower charge.

See also: Deferred sales load

Study this card Source: FINRA Rule 2341 - (d)(6)(A)

A sales charge assessed when shares are redeemed, often declining with the holding period.

Also called: Back-end load; Contingent deferred sales charge; CDSC

See also: Front-end sales load

Study this card Source: SEC Mutual Fund and ETF Fees and Expenses Investor Bulletin - Sales Loads

A retirement plan promising benefits determined by a formula, often using pay and years of service.

Also called: Pension plan

See also: Defined contribution plan

Study this card Source: IRS Retirement Plans Definitions - Defined benefit plan

A retirement plan with individual accounts whose value depends on contributions, investment results, and fees.

See also: Defined benefit plan

Study this card Source: IRS Retirement Plans Definitions - Defined contribution plan

Central securities depository that holds securities for its participant firms.

Also called: DTC

See also: Clearing agency, Transfer agent

Study this card Source: SEC Investor.gov: Market Participants - Clearing Agencies

An investment program providing flow-through tax consequences to participants, regardless of its legal structure.

Also called: DPP

See also: Limited partnership

Study this card Source: FINRA Rule 2310(a)(4), (8)-(9) - Definitions

A retirement-plan distribution paid directly to another eligible plan or IRA, generally avoiding mandatory withholding.

See also: 60-day rollover

Study this card Source: IRS Rollovers of Retirement Plan and IRA Distributions - How do I complete a rollover - 1

A firm meeting Rule 3170's specified expulsion, revocation, or security-futures sanction criteria; its former staff can trigger taping duties.

See also: Taping firm

Study this card Source: FINRA Rule 3170(a)(2)

Reg BI's requirement for written, full and fair disclosure of material relationship facts and conflicts before or at recommendation.

See also: Regulation Best Interest

Study this card Source: SEC 17 CFR 240.15l-1 - (a)(2)(i)

A form supplement providing details of an event behind an affirmative disclosure answer.

Also called: DRP

See also: Form U4

Study this card Source: FINRA Form U4 - What Must Be Included

Interest rate a Reserve Bank charges eligible depository institutions to borrow at its discount window, set by its board subject to Board of Governors review.

See also: Discount window, Open market operations

Study this card Source: Federal Reserve: The Discount Rate

A market price below a fund share's underlying net asset value.

See also: Premium to NAV

Study this card Source: SEC Updated Investor Bulletin: Exchange-Traded Funds - Premiums and discounts

Federal Reserve lending facility where depository institutions borrow against pledged collateral; primary credit is its main program.

See also: Discount rate

Study this card Source: Federal Reserve: The Discount Rate

An account allowing specified investment decisions by an authorized person, requiring written customer authorization and firm acceptance.

See also: Time and price discretion

Study this card Source: FINRA Rule 3260 - (b)

Written notice that a member is participating or interested in a distribution, given at or before completing the customer's trade.

Also called: FINRA Rule 2269 notice

See also: Underwriting syndicate

Study this card Source: FINRA Rule 2269

Spreading money among different investments to reduce concentration risk; it cannot guarantee protection against loss.

See also: Asset allocation

Study this card Source: SEC Beginners Guide to Asset Allocation - Diversification 101

Using a fund's income distributions to purchase additional shares rather than receiving cash.

See also: Capital gain distribution

Study this card Source: SEC Investor.gov Mutual Funds - How do mutual funds earn returns

Checking identity through suitable documents, such as government photo identification or entity formation records.

See also: Non-documentary identity verification

Study this card Source: 31 CFR 1023.220 - (a)(2)(ii)(A)

Investing equal dollar amounts at regular intervals, buying more shares at lower prices and fewer at higher prices.

Also called: DCA

See also: Rebalancing

Study this card Source: SEC Investor.gov Dollar Cost Averaging - Definition

List of people who asked not to be called; firms must honor their own list and the FTC national registry, subject to exceptions.

Also called: National do-not-call registry

See also: Telemarketing calling hours

Study this card Source: FINRA Rule 3230(a)

Congress's direction that Federal Reserve monetary policy pursue maximum employment and stable prices, with 2 percent PCE inflation as the price goal.

Also called: Maximum employment and stable prices

See also: Federal Open Market Committee

Study this card Source: Federal Reserve FAQ: economic goals of monetary policy

An extra federal tax, generally 10%, on certain taxable retirement withdrawals before age 59 1/2 unless an exception applies.

See also: 60-day rollover

Study this card Source: IRS Topic 558 Additional Tax on Early Distributions - Opening paragraphs; Exceptions

Net income divided by shares outstanding, showing what each share would receive if all earnings were paid out.

Also called: EPS

See also: Income statement

Study this card Source: SEC Beginners' Guide to Financial Statements

A 529 arrangement investing contributions for future eligible education expenses; investment values can fluctuate.

See also: Prepaid tuition plan

Study this card Source: SEC An Introduction to 529 Plans Investor Bulletin - Differences between plan types

Pay directed into an employer retirement plan at the employee's election, with pretax or designated Roth treatment as permitted.

Also called: Salary deferral; Salary reduction contribution

See also: 401(k) plan

Study this card Source: IRS Retirement Plans Definitions - Elective deferrals

A retirement-plan payment by an employer linked to the employee's contributions, subject to the plan's terms.

See also: Elective deferral, Vesting

Study this card Source: IRS Retirement Topics Contributions - Employer contributions

A real estate investment company focused on owning and operating properties rather than financing real estate loans.

See also: Mortgage REIT

Study this card Source: SEC Publicly Traded REITs Investor Bulletin - Private REITs; Mortgage REITs; Regular dividend payments

Information needed to service an account, follow instructions, verify authority, and comply with applicable requirements.

See also: Know your customer

Study this card Source: FINRA Rule 2090 - Supplementary Material .01

A contract exercisable only during its specified exercise period on the expiration date.

See also: American-style option

Study this card Source: FINRA Options - Glossary: American-Style Contract; European-Style Contract; Covered Call; Options by Underlying Asset

Series of trades that, taken together, is excessive for the customer's investment profile; FINRA says no single test defines it.

See also: Quantitative suitability, Turnover rate, Cost-equity ratio

Study this card Source: FINRA Rule 2111, Supplementary Material .05(c)

A charge for moving an investment from one mutual fund to another within the same fund family.

See also: Exchange privilege

Study this card Source: SEC Mutual Fund and ETF Fees and Expenses Investor Bulletin - Exchange Fee

A fund feature allowing movement between funds in the same family under stated terms; taxable accounts may realize gains or losses.

See also: Exchange fee

Study this card Source: SEC Mutual Funds and ETFs Investor Guide - Printed page 30 - A Word about Exchanging Shares

A pooled investment whose shares trade on an exchange during the day at market prices that may differ from NAV.

Also called: ETF

See also: Authorized participant

Study this card Source: SEC Updated Investor Bulletin: Exchange-Traded Funds - How are ETFs different

An unsecured financial-institution debt obligation traded on an exchange, with returns linked to a benchmark and issuer credit risk.

Also called: ETN

See also: Exchange-traded fund, Credit risk

Study this card Source: SEC Exchange Traded Notes Investor Bulletin - What are ETNs

First day a buyer misses the declared dividend; usually the record date itself, or the business day before it when the record date is not a business day.

Also called: Ex-date

See also: Record date

Study this card Source: SEC Investor.gov glossary: Ex-Dividend Dates

A confirmation's statement of transaction time, or notice that the time will be supplied upon written request where allowed.

See also: Trade confirmation

Study this card Source: SEC 17 CFR 240.10b-10 - (a)(1)

Annual fund operating expenses expressed as a percentage of average net assets; it does not include every possible investor cost.

See also: Management fee, 12b-1 fee

Study this card Source: SEC Mutual Fund and ETF Fees and Expenses Investor Bulletin - Total Annual Fund Operating Expenses

The requirement to present benefits and risks honestly and provide a sound basis for evaluating an investment.

See also: Investment comparison

Study this card Source: FINRA Rule 2210(d)(1)

Combining eligible relatives' fund holdings for breakpoint qualification when the fund's rules permit it.

Also called: Householding

See also: Rights of accumulation

Study this card Source: FINRA Breakpoints Disclosure Statement - Rights of Accumulation

Coverage of bank deposits up to $250,000 per depositor, per insured bank, per ownership category; it never covers stocks, bonds, mutual funds or annuities.

Also called: FDIC coverage

See also: Securities Investor Protection Corporation

Study this card Source: FDIC: Understanding Deposit Insurance

Federal Reserve committee that specifies the short-term objective for open market operations.

Also called: FOMC

See also: Open market operations, Dual mandate

Study this card Source: Federal Reserve: Open Market Operations

Report of a transaction the member does not believe was a bona fide purchase or sale; FINRA Rule 5210 bars publishing it.

See also: Manipulative device

Study this card Source: FINRA Rule 5210

Wrongful taking or control of a specified adult's assets, including through deception, intimidation, or undue influence.

See also: Specified adult

Study this card Source: FINRA Rule 2165 - (a)(4)

The customer's resources and obligations, including income, net worth, and other investments, relevant to account decisions.

See also: Risk tolerance

Study this card Source: SEC Investor Bulletin: How to Open a Brokerage Account - Information You May Need to Provide

Private not-for-profit membership organization that writes and enforces rules for broker-dealers and their representatives under SEC supervision.

Also called: Financial Industry Regulatory Authority

See also: Self-regulatory organization, Securities and Exchange Commission

Study this card Source: FINRA: About FINRA

FINRA demand for information, documents or testimony; members and associated persons may not fail to provide it.

Also called: 8210 request

See also: FINRA

Study this card Source: FINRA Rule 8210(c)

Underwriting in which the underwriters commit to take and pay for all of the securities if any are taken.

See also: Best efforts underwriting, Initial public offering

Study this card Source: 17 CFR 229.508(a), Instruction

The broker-dealer's training program addressing professional responsibility and registered persons' roles and activities.

See also: Regulatory Element

Study this card Source: FINRA Continuing Education - Firm Element

The annual assessment of a member's training priorities, considering its business, regulatory developments and staff needs.

See also: Written training plan

Study this card Source: FINRA Rule 1240(b)(2)(A)

A contract with insurer-backed interest or income guarantees; rates and guarantee periods depend on its terms.

See also: Variable annuity

Study this card Source: FINRA Annuities - Fixed Annuities

Debt whose stated interest rate stays unchanged over its term.

See also: Floating-rate bond

Study this card Source: SEC Investor.gov Corporate Bonds - Basic types; Bankruptcy priority

Debt whose interest rate resets periodically by reference to a benchmark.

Also called: Variable-rate bond

See also: Fixed-rate bond

Study this card Source: SEC Investor.gov Corporate Bonds - Basic types; Bankruptcy priority

Forging signatures or falsifying documents; it violates FINRA Rule 2010 and, if a firm record, Rule 4511.

Also called: Falsifying records

See also: Books and records retention

Study this card Source: FINRA Regulatory Notice 22-18

Notice required when Rule 144 sales in three months exceed 5,000 shares or $50,000.

Also called: Notice of proposed sale

See also: Restricted security, Rule 144 holding period

Study this card Source: 17 CFR 230.144(h)

A relationship summary describing a firm's services, fees, conflicts, conduct standard, and reportable disciplinary history.

Also called: Customer relationship summary

See also: Disclosure obligation

Study this card Source: SEC Investor.gov Form CRS - What can I learn from a relationship summary

The SEC notice of an exempt Regulation D offering, generally filed within 15 calendar days after the first sale.

See also: Rule 506(b) offering

Study this card Source: 17 CFR 230.503(a)(1)

The uniform individual application for securities-industry registration or transfer, including background and disclosure information.

Also called: Uniform Application for Securities Industry Registration or Transfer

See also: Form U5

Study this card Source: FINRA Form U4 - Introduction

An update keeping an individual's registration information current; routine changes generally have a 30-day deadline after discovery.

See also: Form U4

Study this card Source: FINRA Individual Registration - Updating an Individual's Registration

The written explanation a member provides about the form's arbitration clause when obtaining the person's signature or acknowledgment.

See also: Predispute arbitration agreement

Study this card Source: FINRA Rule 2263, introductory paragraph

Reporting of specified criminal charges and dispositions; the felony question asks about charges as well as convictions.

See also: Disclosure Reporting Page

Study this card Source: FINRA Form U4, 14A-14B, printed page 13

Reporting of specified financial events, including ten-year bankruptcy history and current unsatisfied judgments or liens.

See also: Disclosure Reporting Page

Study this card Source: FINRA Form U4, 14K-14M, printed page 15

The firm's check of initial or transfer application accuracy and completeness, due within 30 calendar days after filing.

See also: Applicant background investigation

Study this card Source: FINRA Rule 3110(e), verification procedures

The uniform notice terminating an individual's securities-industry registration and reporting applicable termination details.

Also called: Uniform Termination Notice for Securities Industry Registration

See also: Form U4

Study this card Source: FINRA Form U5 - Introduction

A filing updating a previously terminated individual's disclosure, termination details or residential information.

See also: Form U5

Study this card Source: FINRA Form U5 - What Kind of U5 Filings Are There

Using the NAV next calculated after an eligible purchase or redemption order is received, rather than a previously published price.

See also: Net asset value

Study this card Source: 17 CFR 270.22c-1 - (a)

Ownership of less than one whole share of a security.

See also: Dividend reinvestment

Study this card Source: SEC Fractional Share Investing Investor Bulletin - What are Fractional Shares

Buying and selling a security before paying for it in a cash account, which violates Regulation T.

Also called: Free riding

See also: Account freeze, Cash account

Study this card Source: SEC Investor.gov glossary: Freeriding

A sales charge deducted when fund shares are purchased, reducing the amount actually invested.

Also called: Front-end load

See also: Deferred sales load

Study this card Source: SEC Updated Investor Bulletin: Mutual Fund Classes - Common Classes With Sales Loads

Trading while holding material, nonpublic information about an imminent block transaction, before that information is public; barred by FINRA Rule 5270.

Also called: Trading ahead of a block

See also: Block transaction, Insider trading penalty

Study this card Source: FINRA Rule 5270(a)

A filing ending an individual's registrations with all SROs and jurisdictions through the terminating firm.

See also: Partial Form U5 termination

Study this card Source: FINRA Form U5 - Full Form

Required presentation of applicable sales charges and gross annual expenses when an advertisement quotes fees or expenses.

See also: Rule 482 advertisement

Study this card Source: 17 CFR 230.482(i)

Delaying placement of a customer's investment-company order to profit from the delay, prohibited by FINRA Rule 2341.

See also: Best execution

Study this card Source: FINRA Rule 2341 - (f)

The combined securities and other investments owned by a pooled investment fund.

See also: Mutual fund

Study this card Source: SEC Investor.gov Mutual Funds - What are mutual funds

A comparison placing a fund within a category for a stated period, subject to source, category, and performance disclosures.

Also called: Investment company ranking

See also: Ranking category

Study this card Source: FINRA Rule 2212(b)-(c)

An interest in the same fund portfolio offered with a particular fee and expense structure.

Also called: Share class

See also: Class A shares, Class C shares

Study this card Source: SEC Updated Investor Bulletin: Mutual Fund Classes - What are Mutual Fund Classes

Municipal debt backed by an issuer's full faith and credit, commonly supported by taxing power.

Also called: GO bond

See also: Revenue bond

Study this card Source: SEC Investor.gov Municipal Bonds - What are municipal bonds

Public outreach to attract securities buyers, such as broad advertising; Rule 502(c) generally bars it unless an exemption allows it.

See also: Rule 506(c) offering

Study this card Source: 17 CFR 230.502(c)

General material about fund types or services that does not name a specific investment company or its securities.

See also: Rule 482 advertisement

Study this card Source: 17 CFR 230.135a(a)

Combining a member's and its associated persons' covered gifts to the same recipient when applying the annual Rule 3220 limit.

See also: Business gift limit

Study this card Source: FINRA Rule 3220.03

A trading instruction remaining active until filled or canceled, subject to the brokerage firm's time limits.

Also called: GTC order

See also: Day order

Study this card Source: SEC Understanding Order Types Investor Bulletin - Good-Til-Canceled

Value of the final goods and services produced in the United States, without double counting intermediate goods.

Also called: GDP

See also: Gross national product

Study this card Source: BEA: Gross Domestic Product

Value of final goods and services produced by labor and property supplied by U.S. residents, wherever located.

Also called: GNP

See also: Gross domestic product

Study this card Source: BEA glossary: national measures

Shares of a company whose earnings grow faster than the market average, often with little dividend income.

See also: Income stock

Study this card Source: SEC Investor.gov Stocks - What are stocks; What kinds of stocks are there

Promise to protect a customer from losses in a securities transaction or account; FINRA Rule 2150(b) prohibits it.

Also called: Loss guarantee

See also: Improper use of customer funds

Study this card Source: FINRA Rule 2150(b)

A privately offered pooled investment using flexible strategies, generally restricted to investors meeting specified qualifications.

See also: Private equity fund

Study this card Source: SEC Investor.gov Hedge Funds - What are hedge funds; Redemption limits

Using an offsetting investment to reduce a potential loss on another holding, usually with additional costs and risks.

See also: Diversification

Study this card Source: FINRA Risk - What Is Risk; Managing Risk

Below-investment-grade debt generally paying more interest to compensate for greater default risk.

Also called: Junk bond; Non-investment-grade bond

See also: Investment-grade bond

Study this card Source: SEC Investor.gov Corporate Bonds - Basic types; Bankruptcy priority

Customer's written instruction to hold mail; holds beyond three months need an acceptable reason, and convenience does not qualify.

Also called: Holding customer mail

See also: Customer account statement

Study this card Source: FINRA Rule 3150(a)(1)

A contract purchased to begin income payments promptly, rather than accumulate savings over an extended initial period.

See also: Deferred annuity

Study this card Source: FINRA Annuities - Immediate and deferred annuities

Using a customer's securities or funds for an unauthorized purpose; FINRA Rule 2150(a) bars it.

Also called: Misuse of customer assets

See also: Guarantee against loss, Sharing in customer accounts

Study this card Source: FINRA Rule 2150(a)

Buying and quickly selling the same securities; a pattern FINRA lists as possible evidence of excessive trading.

See also: Excessive trading

Study this card Source: FINRA Rule 2111, Supplementary Material .05(c)

Financial statement showing how much a company earned and spent over a period, ending in net income.

Also called: Profit and loss statement; P&L

See also: Balance sheet, Earnings per share

Study this card Source: SEC Beginners' Guide to Financial Statements

Shares purchased for regular dividend payments rather than primarily for price appreciation.

See also: Growth stock

Study this card Source: SEC Investor.gov Stocks - What are stocks; What kinds of stocks are there

Including permitted information through a specific identified document rather than repeating it in the summary prospectus.

See also: Summary prospectus

Study this card Source: 17 CFR 230.498(b)(3)

An objective review of program compliance, generally required annually, with a limited two-year exception for certain firms.

See also: Anti-money laundering program

Study this card Source: FINRA Rule 3310 - (c)

A fund designed to track a specified market index, with actual returns affected by costs and tracking differences.

See also: Actively managed fund

Study this card Source: SEC Investor.gov Mutual Funds - Common investing strategies

A contract based on an index value that settles in cash rather than through delivery of shares.

See also: Call option, Put option

Study this card Source: FINRA Options - Glossary: American-Style Contract; European-Style Contract; Covered Call; Options by Underlying Asset

An investment account owned by one person, with assets transferred at death under applicable beneficiary or estate arrangements.

Also called: Single account

See also: Joint account

Study this card Source: FINRA Plan Now to Smooth the Transfer of Your Brokerage Account Assets on Death - Account Ownership Structure

The possibility that rising prices erode the purchasing power of investment income or principal.

Also called: Purchasing power risk

See also: Interest rate risk

Study this card Source: SEC Investor.gov Municipal Bonds - Risks: Credit; Inflation; Interest rate; Liquidity

A clear explanation of privacy practices generally provided when a customer relationship begins, subject to stated exceptions.

See also: Customer relationship

Study this card Source: 17 CFR 248.4 - (a), (e)

When a company first sells its shares to the public.

Also called: IPO

See also: Firm commitment underwriting, Best efforts underwriting

Study this card Source: SEC Investor.gov glossary: Initial Public Offering

SEC civil penalty of up to three times the profit gained or loss avoided by trading on or tipping material nonpublic information.

Also called: Treble penalty

See also: Controlling person penalty, Rule 10b-5

Study this card Source: Securities Exchange Act section 21A(a)(2), 15 USC 78u-1

Written material sent only to institutional investors; a firm's internal messages do not qualify.

See also: Institutional investor

Study this card Source: FINRA Rule 2210(a)(3)

A person in Rule 2210's specified categories, including qualifying institutions, governments, member firms, and registered persons.

See also: Retail investor

Study this card Source: FINRA Rule 2210(a)(4)

The possibility that changing market interest rates reduce an investment's value; fixed-rate bond prices generally fall as rates rise.

See also: Reinvestment risk

Study this card Source: SEC Investor.gov Municipal Bonds - Risks: Credit; Inflation; Interest rate; Liquidity

Placing another party between a broker and the best market in a way inconsistent with the broker's best-execution duty.

See also: Best execution

Study this card Source: FINRA Rule 5310 - (a)(2)

A call with its strike below the stock price, or a put with its strike above the stock price.

Also called: ITM

See also: Out-of-the-money option

Study this card Source: SEC Introduction to Options Investor Bulletin - Basic Options Terminology

Person or firm in the business of providing investment advice to investors.

Also called: IA; RIA

See also: State securities regulator

Study this card Source: SEC Investor.gov: Market Participants - Investment Advisers

A presentation contrasting products or services that must disclose their material differences.

See also: Fair and balanced standard

Study this card Source: FINRA Rule 2210(d)(2)

The customer's prior familiarity with investments and transactions, used to understand their background.

See also: Know your customer

Study this card Source: SEC Investor Bulletin: How to Open a Brokerage Account - Information You May Need to Provide

Debt carrying a relatively strong credit rating, indicating lower expected default risk than high-yield debt.

See also: High-yield bond

Study this card Source: SEC Investor.gov Corporate Bonds - Basic types; Bankruptcy priority

Using borrowed money or derivatives to increase investment exposure, magnifying both potential gains and potential losses.

Also called: Leverage

See also: Hedge fund

Study this card Source: SEC Investor.gov Hedge Funds - Leverage and speculative techniques

The financial purpose guiding an account's investments, such as income, growth, or capital preservation.

See also: Time horizon

Study this card Source: SEC Investor Bulletin: How to Open a Brokerage Account - Information You May Need to Provide

The general limit of one IRA-to-IRA 60-day rollover in 12 months across an owner's IRAs; direct transfers and conversions are excluded.

See also: Trustee-to-trustee transfer

Study this card Source: IRS Rollovers of Retirement Plan and IRA Distributions - IRA one-rollover-per-year rule

A completed transfer to the minor beneficiary that the donor cannot reclaim merely by changing their mind.

See also: UTMA/UGMA account

Study this card Source: FINRA Regulatory Notice 20-07 - Background and Discussion

An arrangement generally not freely changeable or revocable by its creator once established.

See also: Revocable trust

Study this card Source: FINRA Investment Accounts - Trusts

An investment account with multiple owners; the registration determines ownership and survivorship rights.

See also: Joint tenants with right of survivorship, Tenants in common

Study this card Source: FINRA Plan Now to Smooth the Transfer of Your Brokerage Account Assets on Death - Account Ownership Structure

Co-ownership in which a deceased owner's interest passes to surviving owners rather than through probate.

Also called: JTWROS

See also: Tenants in common

Study this card Source: FINRA Plan Now to Smooth the Transfer of Your Brokerage Account Assets on Death - Account Ownership Structure

The duty to use reasonable diligence to learn and retain essential customer facts throughout the account relationship.

Also called: KYC

See also: Essential customer facts

Study this card Source: FINRA Rule 2090 - Rule text

Improperly obtaining an earlier fund NAV for an order placed after that price was calculated.

See also: Forward pricing

Study this card Source: FINRA Notice to Members 03-50 - Discussion

An investor's statement of intended future fund purchases used to qualify for a sales-charge discount under the fund's rules.

Also called: LOI

See also: Sales charge breakpoint

Study this card Source: FINRA Breakpoints Disclosure Statement - Letters of Intent

An asset-based sales charge collected over time rather than entirely at purchase.

See also: Class C shares

Study this card Source: FINRA Breakpoints Disclosure Statement - Sales Charges

An investor who does not manage the partnership's daily operations and has limited liability.

See also: Limited partnership

Study this card Source: FINRA Rule 2310(a)(4), (8)-(9) - Definitions

An investment structure with at least one general partner and one limited partner.

Also called: LP

See also: Direct participation program, Limited partner

Study this card Source: FINRA Rule 2310(a)(4), (8)-(9) - Definitions

An order to buy at a specified price or lower, or sell at that price or higher; execution is not guaranteed.

See also: Market order

Study this card Source: SEC Understanding Order Types Investor Bulletin - Limit Order

The expected need to obtain cash from investments quickly to meet spending or other obligations.

See also: Time horizon

Study this card Source: SEC Investor Bulletin: How to Open a Brokerage Account - Information You May Need to Provide

The possibility of being unable to sell an investment promptly at an acceptable price.

See also: Public non-traded REIT

Study this card Source: SEC Investor.gov Municipal Bonds - Risks: Credit; Inflation; Interest rate; Liquidity

A pooled short-term investment vehicle for participating governmental entities' public funds.

Also called: LGIP

See also: Money market fund

Study this card Source: MSRB LGIP Investment Pool Structure - Opening paragraphs

A stated interval during which a fund investor cannot redeem the investment.

See also: Hedge fund, Liquidity risk

Study this card Source: SEC Investor.gov Hedge Funds - What are hedge funds; Redemption limits

Profit generally realized on the sale of a capital asset held for more than one year.

See also: Short-term capital gain

Study this card Source: IRS Topic 409 Capital Gains and Losses - Short-term or long-term

Equity that must stay in a margin account after purchase: generally 25 percent of the current market value of long margin securities.

Also called: Maintenance requirement

See also: Minimum margin equity, Regulation T initial margin

Study this card Source: FINRA Rule 4210(c)(1)

A fund-asset charge compensating the investment adviser for managing the portfolio and specified related services.

See also: Expense ratio

Study this card Source: SEC Mutual Fund and ETF Fees and Expenses Investor Bulletin - Annual Fund Operating Expenses

Any manipulative, deceptive or fraudulent device used to effect or induce a securities transaction; FINRA Rule 2020 prohibits it.

Also called: Market manipulation

See also: Fictitious trade report, Rule 10b-5

Study this card Source: FINRA Rule 2020

A brokerage account allowing loans secured by account assets, with interest costs and additional loss risk.

See also: Cash account

Study this card Source: SEC Investor Bulletin: How to Open a Brokerage Account - Cash or margin account

The amount below the prevailing market price paid when a dealer buys a security from a customer as principal.

See also: Markup, Principal transaction

Study this card Source: FINRA Rule 2121 - Supplementary Material .01(c)(3)

An exchange-traded security order seeking prompt execution at the best available price, without a guaranteed execution price.

See also: Limit order

Study this card Source: SEC Understanding Order Types Investor Bulletin - Market Order

The possibility that broad market conditions reduce an investment's value.

Also called: Systematic risk

See also: Nonsystematic risk

Study this card Source: FINRA Risk - What Is Risk; Managing Risk

The amount above the prevailing market price charged when a dealer sells a security to a customer as principal.

See also: Markdown, Principal transaction

Study this card Source: FINRA Rule 2121 - Supplementary Material .01(a)(3)

Leaving out an important fact needed to prevent a statement from misleading its audience.

See also: Misleading sales literature

Study this card Source: 17 CFR 230.156(a)

The member's request to sponsor a statutorily disqualified individual's association, including proposed employment and supervision.

See also: Statutory disqualification

Study this card Source: FINRA Eligibility Requirements - MC-400 Applications

A voluntary negotiation aided by a neutral person who cannot impose a decision; settlement binds only when agreed and signed.

See also: Arbitration

Study this card Source: FINRA Overview of Arbitration and Mediation - Mediation

FINRA requirement of at least $2,000 equity in a margin account, though cash need not exceed the cost of the purchase.

Also called: $2,000 minimum

See also: Margin account, Maintenance margin

Study this card Source: FINRA Rule 4210(b)(4)

Promotional material containing a material falsehood or omission, evaluated in the context of its overall presentation.

See also: Material omission

Study this card Source: 17 CFR 230.156(a)-(b)

A fund investing in short-term debt and cash equivalents; it is an investment, not an FDIC-insured bank deposit.

See also: Bond fund

Study this card Source: SEC Investor.gov Mutual Funds - Types of mutual funds; Risks

A variable-contract fee compensating the insurer for specified insurance risks and related contract costs.

Also called: M&E charge

See also: Surrender charge

Study this card Source: SEC Investor.gov Variable Annuities - What will I pay - Base contract fee

Debt secured by a pool of real estate loans, giving investors claims on the borrowers' principal and interest payments.

Also called: MBS

See also: Asset-backed security

Study this card Source: FINRA Bonds - Glossary: Convertible Bond; Asset-Backed Securities; Agency Security

A real estate investment company providing real estate financing through loans or holdings of mortgage-backed securities.

See also: Equity REIT, Mortgage-backed security

Study this card Source: SEC Publicly Traded REITs Investor Bulletin - Private REITs; Mortgage REITs; Regular dividend payments

Person who advises a municipal entity or obligated person on bond issues or municipal financial products; owes a fiduciary duty to municipal entity clients.

Also called: MA

See also: Municipal Securities Rulemaking Board, Official statement

Study this card Source: SEC Registration of Municipal Advisors FAQs - Questions 1.3 and 3.5

Debt issued by a state, locality or other governmental entity to finance public operations or projects.

Also called: Muni

See also: General obligation bond, Revenue bond

Study this card Source: SEC Investor.gov Municipal Bonds - What are municipal bonds

G-37's general two-year restriction on business with a municipal entity after a covered, non-exempt political contribution.

See also: Political contribution voting-right exception

Study this card Source: MSRB Rule G-37(b)(i)(A)

A written letter or email distributed to more than 25 persons within 90 consecutive days under MSRB G-21.

See also: Municipal securities advertisement

Study this card Source: MSRB Rule G-21(a)(ii)

A municipal security whose issuer would be an investment company except for the governmental exemption in the Investment Company Act.

See also: 529 plan

Study this card Source: MSRB Rule D-12 - Rule text

Promotional material covered by MSRB G-21, including public media, brochures, seminar texts, and telemarketing scripts.

See also: Municipal form letter

Study this card Source: MSRB Rule G-21(a)(i)

SRO created by Congress in 1975 to write rules for the municipal market; it has authority to write rules but not to enforce them.

Also called: MSRB

See also: Self-regulatory organization, Official statement

Study this card Source: MSRB notice on its regulatory structure

An open-end pooled investment whose shares investors buy from or redeem with the fund at the next calculated NAV, plus applicable charges.

See also: Net asset value

Study this card Source: SEC Investor.gov Mutual Funds - What are mutual funds; How do I buy and sell

Association of state and provincial securities regulators; its website helps investors find their state securities regulator.

Also called: North American Securities Administrators Association

See also: State securities regulator

Study this card Source: SEC Investor.gov glossary: State Securities Regulators

Express written customer permission to obtain or submit a check or similar instrument drawn on the customer's account.

See also: Customer account record

Study this card Source: FINRA Rule 4514 - First paragraph

Fund assets minus liabilities; per-share value equals that amount divided by outstanding shares.

Also called: NAV

See also: Public offering price

Study this card Source: SEC Investor.gov Net Asset Value - Definition and per share NAV

The amount received from selling fund shares after deducting applicable redemption fees and sales charges.

See also: Redemption request

Study this card Source: SEC Mutual Funds and ETFs Investor Guide - Printed page 9 - Liquidity and Trading Convenience

A financial-institution agreement under which a member broker-dealer provides brokerage services on or off the institution's premises.

See also: Bank brokerage separation

Study this card Source: FINRA Rule 3160(b)(2)

Initial public offering of equity securities; Rule 5130 bars selling it to accounts in which a restricted person has a beneficial interest.

See also: Restricted person, Initial public offering

Study this card Source: FINRA Rule 5130(a)(1)

A fund without front-end or deferred sales loads; FINRA also limits sales-related and service charges against assets for this label.

See also: Expense ratio

Study this card Source: FINRA Rule 2341 - (d)(4)

Checking identity through other reliable methods, such as independent databases, customer contact, or financial-institution references.

See also: Documentary identity verification

Study this card Source: 31 CFR 1023.220 - (a)(2)(ii)(B)

Protected personally identifiable financial information and certain derived lists, excluding information the rule treats as public.

Also called: NPI

See also: Privacy opt-out notice

Study this card Source: 17 CFR 248.3 - (t)-(u)

Exposure to events affecting a particular company or industry rather than the whole market.

Also called: Unsystematic risk; Specific risk

See also: Diversification

Study this card Source: FINRA Risk - What Is Risk; Managing Risk

A holding the receiving firm cannot accept, requiring special instructions rather than automatic transfer.

See also: Automated Customer Account Transfer Service

Study this card Source: FINRA Rule 11870 - (c), (d)

Effectiveness of a registration statement is not an SEC finding on accuracy or merits; telling a buyer otherwise is unlawful.

Also called: Section 23 disclaimer

See also: Registration statement effective date

Study this card Source: Securities Act section 23, 15 USC 77w

Disclosure document for a municipal offering, similar to a prospectus; dealers must deliver it to buyers in the offering by settlement.

Also called: OS

See also: Primary offering disclosure period, Municipal Securities Rulemaking Board

Study this card Source: MSRB Rule G-32(a)(i)

Risk-based review of customer relationships and activity, including updates to information when warranted.

Also called: CDD

See also: Customer risk profile

Study this card Source: FINRA Rule 3310 - (f)

A central bank's purchases and sales of securities in the open market, a key Federal Reserve tool for carrying out monetary policy.

Also called: OMO

See also: Federal Open Market Committee, Discount rate

Study this card Source: Federal Reserve: Open Market Operations

Notice requiring an option seller to fulfill the contract when a holder exercises.

See also: Option exercise

Study this card Source: SEC Introduction to Options Investor Bulletin - Basic Options Terminology

A holder invoking the contractual right to buy or sell the underlying security at the strike price.

See also: Option assignment

Study this card Source: SEC Introduction to Options Investor Bulletin - Basic Options Terminology

The final date on which an option contract remains valid.

See also: American-style option

Study this card Source: FINRA Options - Glossary: American-Style Contract; European-Style Contract; Covered Call; Options by Underlying Asset

The upfront price a buyer pays a seller for the rights conveyed by an option contract.

See also: Strike price

Study this card Source: SEC Introduction to Options Investor Bulletin - Basic Options Terminology

The risk disclosure brokerage firms provide options customers, titled Characteristics and Risks of Standardized Options.

Also called: ODD

See also: Call option, Put option

Study this card Source: FINRA Options - Glossary: American-Style Contract; European-Style Contract; Covered Call; Options by Underlying Asset

For SEC order records, the time the firm transmits an order or instruction for execution.

See also: Order receipt time

Study this card Source: SEC 17 CFR 240.17a-3 - (a)(6)(i)(A)

A brokerage record of an order's terms, account, personnel, relevant times, and changes, whether executed or not.

Also called: Order ticket

See also: Cancelled order record

Study this card Source: SEC 17 CFR 240.17a-3 - (a)(6)(i)

The recorded time a firm receives a customer's brokerage order, distinct from when it sends that order for execution.

See also: Order entry time

Study this card Source: SEC 17 CFR 240.17a-3 - (a)(6)(i)(A)

Occasional recording of order details while a registered person is unavailable; that person must confirm with the customer before entry.

See also: Clerical registration exemption

Study this card Source: FINRA Rule 1230.01

A contract with no intrinsic value: the stock is below a call's strike or above a put's strike.

Also called: OTM

See also: In-the-money option

Study this card Source: SEC Introduction to Options Investor Bulletin - Basic Options Terminology

Work or business outside the firm that a registered person must disclose to the member in prior written notice, in the form the firm requires.

Also called: OBA

See also: Private securities transaction

Study this card Source: FINRA Rule 3270

A filing ending selected SRO or jurisdiction registrations rather than the individual's entire firm registration.

See also: Full Form U5 termination

Study this card Source: FINRA Form U5 - Partial Form

An investment activity expressly excluded from Rule 3270's outside-business notice requirement.

See also: Outside business activity

Study this card Source: FINRA Rule 3270, second paragraph

Historical investment results, which do not establish that similar gains or income will recur.

See also: Performance legend

Study this card Source: 17 CFR 230.156(b)(2)

Payment from an issuer or its affiliate for quoting or making a market in its stock; FINRA Rule 5250 bars members from accepting it.

See also: Dealer

Study this card Source: FINRA Rule 5250

Disclosure explaining that past results do not guarantee future returns and investment value can fluctuate.

See also: Past performance

Study this card Source: 17 CFR 230.482(b)(3)

A registration a member maintains for an eligible associated person even when the person's current duties do not require it.

See also: Securities-industry registration

Study this card Source: FINRA Rule 1210.02

Rule 3220 relief for customary, reasonable personal gifts for infrequent life events unrelated to the recipient employer's business.

See also: Business gift limit

Study this card Source: FINRA Rule 3220.04

G-37 relief for an MFP's contributions totaling no more than $250 per official per election when the MFP may vote for that official.

See also: Municipal business contribution ban

Study this card Source: MSRB Rule G-37(b)(ii)(A)

The possibility that political events in a country harm an investment's value.

See also: Currency risk

Study this card Source: FINRA Risk - What Is Risk; Managing Risk

A legal grant allowing an agent to act for another person within the authority specified in the document.

Also called: POA

See also: Authorized account person

Study this card Source: FINRA Investment Accounts - Power of Attorney

An advance agreement to arbitrate covered future disputes, generally giving up court and jury proceedings for those claims.

See also: Arbitration

Study this card Source: FINRA Rule 2268 - (a)(1), (d), (f)

A permitted notice issued after filing but before effectiveness, warning that sales cannot yet be completed.

See also: Tombstone advertisement

Study this card Source: 17 CFR 230.134(b)(1)

Equity generally paid dividends and liquidation proceeds before common shares, usually without voting rights.

See also: Common stock

Study this card Source: SEC Investor.gov Stocks - What are stocks; What kinds of stocks are there

A market price above a fund share's underlying net asset value.

See also: Discount to NAV

Study this card Source: SEC Updated Investor Bulletin: Exchange-Traded Funds - Premiums and discounts

A 529 arrangement purchasing tuition units or credits at participating institutions, subject to program limitations.

See also: Education savings plan

Study this card Source: SEC An Introduction to 529 Plans Investor Bulletin - Differences between plan types

The possibility that principal is repaid ahead of schedule, changing expected cash flows and reinvestment opportunities.

See also: Mortgage-backed security, Reinvestment risk

Study this card Source: FINRA Bonds - Risks: Reinvestment; Currency; Glossary: Prepayment Risk

Period starting with the first order or issuer sale and ending 25 days after final delivery of the issue to the underwriters.

See also: Official statement

Study this card Source: MSRB Rule G-32(c)(ix)

A qualified supervisor's authorization, generally required before a retail communication is used or filed, subject to exceptions.

See also: Retail communication

Study this card Source: FINRA Rule 2210(b)(1)

A trade in which the dealer buys or sells for its own account as the customer's counterparty.

See also: Agency transaction

Study this card Source: SEC 17 CFR 240.10b-10 - (a)(2)

Syndicate rules for filling municipal orders; customer orders generally come first, and members get them in writing before the first offer.

See also: Underwriting syndicate, Retail order period

Study this card Source: MSRB Rule G-11(e)-(f)

A notice explaining the right and reasonable methods to restrict certain disclosures to nonaffiliated third parties.

See also: Nonpublic personal information

Study this card Source: 17 CFR 248.7 - (a)

A private pooled vehicle making long-term investments in businesses, often with restricted investor withdrawals.

See also: Hedge fund, Liquidity risk

Study this card Source: SEC Investor.gov Private Equity Funds - What are private equity funds; Illiquidity

A real estate investment company offered through a registration exemption, without exchange-listed shares or regular SEC reporting.

See also: Public non-traded REIT

Study this card Source: SEC Publicly Traded REITs Investor Bulletin - Private REITs; Mortgage REITs; Regular dividend payments

Securities deal an associated person takes part in away from the firm; it needs prior written notice of the deal, the person's role and any pay.

Also called: Selling away

See also: Selling compensation, Outside business activity

Study this card Source: FINRA Rule 3280(a)-(b)

Unscripted speaking, such as a seminar or interview, subject to communication standards and applicable conflict disclosures.

See also: Retail communication

Study this card Source: FINRA Rule 2210(f)

Real estate investment company with shares listed on a securities exchange.

See also: Real estate investment trust, Public non-traded REIT

Study this card Source: SEC Investor.gov REITs - What are REITs; Types; Liquidity risks

An SEC-registered real estate investment company whose shares are not exchange-listed and can be difficult to sell.

Also called: Non-exchange-traded REIT

See also: Liquidity risk

Study this card Source: SEC Investor.gov REITs - What are REITs; Types; Liquidity risks

The amount paid for a fund share, generally per-share NAV plus any applicable front-end sales charge.

Also called: POP

See also: Net asset value

Study this card Source: SEC Investor.gov Net Asset Value - Purchase price

A charge paid into fund assets when shares are bought, distinct from a front-end load paid to the selling broker.

See also: Front-end sales load

Study this card Source: SEC Mutual Funds and ETFs Investor Guide - Printed page 26 - Purchase Fee

A buyer's contractual right to sell shares at the strike during the allowed exercise period.

Also called: Put

See also: Call option

Study this card Source: SEC Introduction to Options Investor Bulletin - Basic Options Terminology

Institution that owns and invests at least $100 million in securities of unaffiliated issuers ($10 million for a registered dealer); can buy Rule 144A resales.

Also called: QIB

See also: Rule 144A resale

Study this card Source: 17 CFR 230.144A(a)(1)

A tax-free withdrawal meeting the five-tax-year rule plus an age, death, disability, or qualifying first-home condition.

See also: Roth IRA

Study this card Source: IRS Publication 590-B - Chapter 2 - What Are Qualified Distributions

A Rule 2111 duty to assess whether recommended transactions are excessive when considered together.

See also: Suitability

Study this card Source: FINRA Rule 2111 - Supplementary Material .05(c), .08

The peer group used for a fund comparison; it must support meaningful evaluation and cannot be based on fund asset size.

See also: Fund ranking

Study this card Source: FINRA Rule 2212(e)

An independent public-information provider whose services a fund or affiliate did not procure to assign its ranking.

See also: Fund ranking

Study this card Source: FINRA Rule 2212(a)

A company owning or financing income-producing real estate or related assets, giving investors indirect real estate exposure.

Also called: REIT

See also: Publicly traded REIT

Study this card Source: SEC Investor.gov REITs - What are REITs; Types; Liquidity risks

A duty under Rule 2111 to understand a recommendation and reasonably believe it is appropriate for at least some investors.

See also: Customer-specific suitability

Study this card Source: FINRA Rule 2111 - Supplementary Material .05(a), .08

Adjusting portfolio holdings to restore an intended asset mix after market changes or other drift.

See also: Asset allocation

Study this card Source: SEC Beginners Guide to Asset Allocation - Rebalancing 101

The firm designated to accept transferred customer assets and initiate the authorized ACATS instruction.

Also called: Receiving firm

See also: Carrying member

Study this card Source: FINRA Rule 11870 - (a)(1), (b)(1)

Date a company sets by which an investor must be on its books as a shareholder to receive a declared dividend.

Also called: Date of record

See also: Ex-dividend date

Study this card Source: SEC Investor.gov glossary: Ex-Dividend Dates

A charge paid to the fund when shares are sold back, intended to defray redemption costs rather than compensate a selling broker.

See also: Deferred sales load

Study this card Source: SEC Mutual Fund and ETF Fees and Expenses Investor Bulletin - Redemption Fee

The general requirement to pay mutual-fund redemption proceeds within seven days of receiving the shareholder's request.

See also: Redemption request

Study this card Source: SEC Investor.gov Mutual Fund Redemptions - Definition

An instruction to sell redeemable fund shares back to the fund under its procedures, generally at the next calculated NAV.

See also: Forward pricing

Study this card Source: SEC Investor.gov Mutual Funds - How do I buy and sell mutual funds

The duty to avoid misleading omissions or inaccuracies in membership or registration submissions and correct known errors.

See also: Form U4 amendment

Study this card Source: FINRA Rule 1122

Fingerprint information supplied promptly with Form U4; missing information after 30 days generally makes registration inactive.

See also: Form U4

Study this card Source: FINRA Rule 1010(d)

Generally the twentieth day after filing unless the SEC sets an earlier date; a pre-effective amendment restarts the count.

Also called: 20-day cooling-off period

See also: Securities Act of 1933, Shelf registration

Study this card Source: Securities Act section 8(a), 15 USC 77h

The broker standard requiring retail recommendations to put the customer's interests ahead of the broker's interests.

Also called: Reg BI

See also: Care obligation

Study this card Source: SEC 17 CFR 240.15l-1 - (a)(1)

Federal Reserve requirement that a margin equity security purchase be backed by 50 percent of its current market value.

Also called: Reg T requirement

See also: Margin account, Maintenance margin

Study this card Source: 12 CFR 220.12(a)

Registration-specific continuing education addressing significant rule changes and regulatory developments.

See also: Firm Element

Study this card Source: FINRA Continuing Education - Regulatory Element

The possibility that money returned from an investment cannot earn a comparable rate when invested again.

See also: Interest rate risk

Study this card Source: FINRA Bonds - Risks: Reinvestment; Currency; Glossary: Prepayment Risk

The tax-qualification obligation to distribute at least 90 percent of annual taxable income to shareholders.

See also: Real estate investment trust

Study this card Source: SEC Publicly Traded REITs Investor Bulletin - Private REITs; Mortgage REITs; Regular dividend payments

A role-specific test required alongside the SIE and other prerequisites for representative registration.

See also: Securities Industry Essentials exam

Study this card Source: FINRA Rule 1210.03

The minimum annual withdrawal required from a retirement account once the applicable distribution rules apply.

Also called: RMD

See also: Traditional IRA

Study this card Source: IRS Retirement Topics Required Minimum Distributions - Opening paragraphs

Cash or securities, such as a later dividend, remaining after a whole-account transfer and requiring follow-up delivery.

See also: Automated Customer Account Transfer Service

Study this card Source: FINRA Rule 11870 - (m)(3)

Person such as an officer, director or employee of a broker-dealer, or certain portfolio managers, barred from buying new issues.

See also: New issue

Study this card Source: FINRA Rule 5130(i)(10)

Security acquired from the issuer or an affiliate in a transaction not involving a public offering, so its resale is limited.

See also: Rule 144 holding period, Form 144

Study this card Source: 17 CFR 230.144(a)(3)

Written or electronic material for more than 25 retail investors in any 30-calendar-day period.

See also: Correspondence

Study this card Source: FINRA Rule 2210(a)(5)

For Reg BI, a natural person or legal representative using a broker recommendation mainly for personal, family, or household purposes.

See also: Regulation Best Interest

Study this card Source: SEC 17 CFR 240.15l-1 - (b)(1)

Any person outside the rule's institutional-investor categories, whether or not already a customer.

See also: Institutional investor

Study this card Source: FINRA Rule 2210(a)(6)

Period in a new municipal issue when only orders meeting the issuer's retail criteria are taken, or they get priority.

See also: Priority provisions

Study this card Source: MSRB Rule G-11(a)(vii)

The person or entity designated to receive retirement-account benefits after the owner dies.

See also: Required minimum distribution

Study this card Source: IRS Retirement Topics Beneficiary - Overview

Municipal debt repaid from a specified revenue source rather than the issuer's general taxing power.

See also: General obligation bond

Study this card Source: SEC Investor.gov Municipal Bonds - What are municipal bonds

Combining shares into fewer shares at a higher price, such as 1-for-200; total value is unchanged.

Also called: Reverse split

See also: Stock split

Study this card Source: FINRA: Stock Splits

An arrangement the creator generally can change or cancel during life, subject to its terms and applicable law.

Also called: Living trust

See also: Irrevocable trust

Study this card Source: FINRA Investment Accounts - Trusts

A fund privilege counting eligible existing holdings with a new purchase to qualify for a sales-charge discount.

Also called: ROA

See also: Sales charge breakpoint

Study this card Source: FINRA Breakpoints Disclosure Statement - Rights of Accumulation

An investor's ability and willingness to accept losses in pursuit of potential returns.

See also: Financial situation

Study this card Source: SEC Beginners Guide to Asset Allocation - Asset Allocation 101 - Risk Tolerance

Moving an eligible retirement distribution into another eligible retirement account under rules preserving tax benefits.

See also: Direct rollover, 60-day rollover

Study this card Source: IRS Rollovers of Retirement Plan and IRA Distributions - Why roll over; How do I complete a rollover

Moving eligible pretax retirement assets into a Roth arrangement, generally including previously untaxed amounts in current income.

See also: Roth IRA

Study this card Source: IRS Publication 590-A - Converting From Any Traditional IRA Into a Roth IRA

A personal retirement arrangement funded with nondeductible contributions, offering tax-free qualified withdrawals.

See also: Traditional IRA, Qualified Roth IRA distribution

Study this card Source: IRS Individual Retirement Arrangements - Types of IRAs

SEC antifraud rule barring fraud, untrue statements of material fact and deceptive acts in connection with buying or selling any security.

Also called: Antifraud rule

See also: Manipulative device, Insider trading penalty

Study this card Source: 17 CFR 240.10b-5

Resale of unregistered securities only to qualified institutional buyers, without the seller being treated as an underwriter.

Also called: 144A offering

See also: Qualified institutional buyer

Study this card Source: 17 CFR 230.144A(b), (d)(1)

Minimum time before restricted stock can be resold under Rule 144: six months for a reporting issuer, one year for a non-reporting issuer.

See also: Restricted security, Form 144

Study this card Source: 17 CFR 230.144(d)(1)

Most an affiliate may sell in three months: the greater of 1 percent of shares outstanding or average weekly volume over the prior four calendar weeks.

See also: Form 144

Study this card Source: 17 CFR 230.144(e)(1)

A safe-harbor offering confined to in-state offers and sales by a qualifying local issuer, with restrictions on resales.

See also: General solicitation

Study this card Source: 17 CFR 230.147(b)-(e)

A qualifying fund advertisement treated as a limited prospectus, with required disclosures and standardized performance information.

See also: Performance legend

Study this card Source: 17 CFR 230.482(a)-(b)

An exempt offering without general solicitation, permitting accredited investors and a limited number of sophisticated nonaccredited purchasers.

See also: Rule 506(c) offering

Study this card Source: 17 CFR 230.506(b)

An exempt offering allowing broad solicitation only when all purchasers are accredited and the issuer reasonably verifies that status.

See also: Accredited investor

Study this card Source: 17 CFR 230.506(c)

An investment level at which an eligible fund purchase qualifies for a lower front-end sales charge.

Also called: Breakpoint discount

See also: Rights of accumulation, Letter of intent

Study this card Source: FINRA Breakpoints Disclosure Statement - Breakpoint Discounts

The prohibition on revealing a SAR or information exposing its existence, subject to limited authorized disclosures.

See also: Suspicious activity report

Study this card Source: 31 CFR 1023.320 - (e)

A fund income measure calculated under the SEC-prescribed method, allowing more consistent yield comparisons.

See also: Average annual total return

Study this card Source: 17 CFR 230.482(d)(1)

A qualifying insurance-contract exchange deferring gain recognition; life-to-annuity is permitted, but annuity-to-life is not.

Also called: 1035 exchange

See also: Variable annuity

Study this card Source: 26 CFR 1.1035-1 - Paragraphs (a)-(c)

Exchange Act registration of an equity class once the issuer has over $10 million in assets and 2,000 holders of record, or 500 who are not accredited.

See also: Accredited investor

Study this card Source: Securities Exchange Act section 12(g)(1)(A), 15 USC 78l

Debt backed by specified collateral that creditors may claim if the issuer defaults.

See also: Debenture

Study this card Source: SEC Investor.gov Corporate Bonds - Basic types; Bankruptcy priority

Federal law requiring companies that offer securities to the public to tell the truth about their business; passed in the depth of the Depression.

Also called: 1933 Act

See also: Securities and Exchange Commission, Registration statement effective date

Study this card Source: SEC Investor.gov: The Role of the SEC

Federal agency created by the Securities Exchange Act of 1934 to protect investors, keep markets fair and efficient, and facilitate capital formation.

Also called: SEC

See also: Self-regulatory organization, Securities Act of 1933

Study this card Source: SEC Investor.gov: The Role of the SEC

Ongoing industry learning comprising both the Regulatory Element and the Firm Element.

Also called: CE

See also: Regulatory Element, Firm Element

Study this card Source: FINRA Continuing Education - Introduction

An introductory securities exam open from age 18 without firm sponsorship; passing alone does not confer registration.

Also called: SIE

See also: Representative qualification exam

Study this card Source: FINRA SIE Exam - Overview

Regulatory authorization in a category matching the functions and responsibilities a person performs.

See also: Representative qualification exam

Study this card Source: FINRA Rule 1210 - Registration Requirements

Organization that protects customers of failed member broker-dealers up to $500,000, including $250,000 cash; it does not cover market losses.

Also called: SIPC

See also: SIPC information notice, FDIC deposit insurance

Study this card Source: SIPC: What SIPC Protects

Non-government body, registered with and overseen by the SEC, that writes and enforces rules for its members, such as FINRA for broker-dealers.

Also called: SRO

See also: FINRA, Municipal Securities Rulemaking Board

Study this card Source: FINRA: About FINRA

Any compensation paid directly or indirectly, from any source, in connection with buying or selling a security.

See also: Private securities transaction

Study this card Source: FINRA Rule 3280(e)(2)

Improperly promoting a fund purchase just before an ex-dividend date as advantageous without specific, clearly described benefits.

See also: Dividend reinvestment

Study this card Source: FINRA Rule 2341 - (e)

An insurer-maintained account whose investment gains and losses are credited separately from the insurer's other business.

See also: Subaccount

Study this card Source: SEC 17 CFR 270.0-1 - (e)(1)-(2)

An individual retirement account receiving contributions under an employer's simplified employee pension arrangement.

Also called: Simplified employee pension IRA

See also: SIMPLE IRA plan

Study this card Source: IRS Individual Retirement Arrangements - Types of IRAs

The day a transaction is completed and payment and securities are due for delivery.

See also: Trade date

Study this card Source: FINRA Understanding Settlement Cycles - Opening paragraph

Having purchase money actually received by the brokerage firm by the due date; starting an ACH transfer alone is insufficient.

See also: Settlement date

Study this card Source: FINRA Understanding Settlement Cycles - The T+1 Standard - ACH payments

Sharing profits or losses in a customer account; allowed only with written authorizations and in proportion to the person's own contribution.

Also called: Account sharing

See also: Improper use of customer funds

Study this card Source: FINRA Rule 2150(c)(1)(A)

Registering securities now to sell later on a continuous or delayed basis; automatic shelf sales must occur within three years of effectiveness.

Also called: Rule 415 offering

See also: Registration statement effective date

Study this card Source: 17 CFR 230.415(a)

Regulation T margin for a short sale of a nonexempt equity security: 150 percent of its current market value.

See also: Regulation T initial margin

Study this card Source: 12 CFR 220.12(c)(1)

Profit generally realized on the sale of a capital asset held for one year or less.

See also: Long-term capital gain

Study this card Source: IRS Topic 409 Capital Gains and Losses - Short-term or long-term

The four-year period for which a passing SIE result is valid under FINRA's stated exam requirements.

See also: Securities Industry Essentials exam

Study this card Source: FINRA SIE Exam - Overview

A small-employer retirement arrangement allowing employee salary reductions and requiring matching or nonelective employer contributions.

Also called: Savings Incentive Match Plan for Employees

See also: SEP IRA

Study this card Source: IRS Individual Retirement Arrangements - Types of IRAs

Written notice at account opening and at least yearly telling customers they can get SIPC information, with SIPC's website and phone number.

Also called: FINRA Rule 2266 notice

See also: Securities Investor Protection Corporation

Study this card Source: FINRA Rule 2266

A person 65 or older, or an adult 18 or older reasonably believed unable to protect their interests due to impairment.

See also: Financial exploitation

Study this card Source: FINRA Rule 2165 - (a)(1)

A prohibition imposed by a self-regulatory organization against a person's association with its members.

See also: Statutory disqualification

Study this card Source: FINRA Eligibility Requirements - Disqualification Defined

State agency that enforces blue-sky laws and generally registers investment advisers managing under $100 million with a principal office in the state.

Also called: State securities administrator

See also: Blue-sky laws, NASAA

Study this card Source: SEC Investor.gov glossary: State Securities Regulators

A legally specified impediment to industry association arising from certain criminal, regulatory or other events.

Also called: SD

See also: MC-400 application

Study this card Source: FINRA Eligibility Requirements - Disqualification Defined

The full fund prospectus meeting Securities Act requirements, distinct from a shorter summary document.

See also: Summary prospectus

Study this card Source: 17 CFR 230.498(a)

For a stock dividend, the ex-dividend date is the first business day after the stock dividend is paid.

See also: Ex-dividend date

Study this card Source: SEC Investor.gov glossary: Ex-Dividend Dates

A pooled investment mainly holding company equity securities, with returns tied to those holdings.

Also called: Equity fund

See also: Bond fund

Study this card Source: SEC Investor.gov Mutual Funds - Types of mutual funds

An issuer-created right to purchase securities at a stated price, commonly remaining valid for several years.

Also called: Warrant

See also: Subscription right

Study this card Source: FINRA Rule 11840(a)-(b) - Rights and warrants

Issuing more shares to holders at a proportionally lower price, such as 2-for-1; it does not change the company's value.

Also called: Forward split

See also: Reverse stock split

Study this card Source: FINRA: Stock Splits

An order that becomes a limit order when its stop price is reached, controlling price while risking nonexecution.

See also: Stop order, Limit order

Study this card Source: SEC Understanding Order Types Investor Bulletin - Stop-Limit Order

An order that becomes a market order when the specified trigger price is reached; the trigger is not a guaranteed fill price.

Also called: Stop-loss order

See also: Stop-limit order

Study this card Source: SEC Understanding Order Types Investor Bulletin - Stop Order

The contract price at which an option holder may buy or sell the underlying security.

Also called: Exercise price

See also: Call option, Put option

Study this card Source: SEC Introduction to Options Investor Bulletin - Basic Options Terminology

An investment choice within a variable contract, commonly investing in an underlying mutual fund.

See also: Separate account

Study this card Source: FINRA Annuities - Variable Annuities

Unsecured debt paid after senior debt in the issuer's bankruptcy priority.

Also called: Junior debenture

See also: Debenture

Study this card Source: SEC Investor.gov Corporate Bonds - Basic types; Bankruptcy priority

A privilege offered to existing holders to subscribe for additional securities, usually in proportion to their holdings.

Also called: Rights to subscribe

See also: Stock purchase warrant

Study this card Source: FINRA Rule 11840(a)-(b) - Rights and warrants

The Rule 2111 standard of customer fit for recommendations outside Reg BI's scope.

See also: Regulation Best Interest

Study this card Source: FINRA Rule 2111 - (a), Supplementary Material .08

A concise fund disclosure document presenting key investment information, with access to fuller disclosures.

See also: Statutory prospectus

Study this card Source: 17 CFR 230.498(b)(1)-(2)

A contract fee for certain early withdrawals or cancellation during the stated surrender period.

See also: Deferred annuity

Study this card Source: SEC Investor.gov Variable Annuities - What will I pay - Surrender charge

Review of transactions to identify and report potentially suspicious activity under the firm's AML procedures.

See also: Suspicious activity report

Study this card Source: FINRA Rule 3310 - (a), (f)(ii)

A confidential filing reporting a transaction or attempt meeting applicable suspicion criteria and reporting requirements.

Also called: SAR

See also: Suspicious activity monitoring

Study this card Source: 31 CFR 1023.320 - (a)-(b)

Securities outside Rule 15c6-1's next-day rule, such as government and municipal securities and commercial paper, or by express agreement.

See also: T+1 settlement

Study this card Source: 17 CFR 240.15c6-1(a)

Completion on the next business day after the trade; this is the standard for many securities, including certain mutual funds.

Also called: Next-business-day settlement

See also: Settlement date

Study this card Source: FINRA Understanding Settlement Cycles - The T+1 Standard

A member meeting Rule 3170's staffing thresholds, triggering special supervision and recording of registered persons' customer calls.

See also: Disciplined firm

Study this card Source: FINRA Rule 3170(a)(5), (b)

A fund designed for a particular goal date that typically changes its mix of investments as that date approaches.

See also: Fund portfolio

Study this card Source: SEC Investor.gov Mutual Funds - Types of mutual funds

Cold calls to a residence may not be made before 8 a.m. or after 9 p.m. local time at the called party's location, subject to exceptions.

Also called: Calling hours

See also: Do-not-call list

Study this card Source: FINRA Rule 3230(a)(1)

A permitted pause on disbursements or securities transactions when suspected exploitation meets Rule 2165's conditions.

See also: Financial exploitation

Study this card Source: FINRA Rule 2165 - (b)

Co-ownership with separate interests that can pass to each owner's heirs or beneficiaries, without automatic survivorship.

Also called: TIC

See also: Joint tenants with right of survivorship

Study this card Source: FINRA Plan Now to Smooth the Transfer of Your Brokerage Account Assets on Death - Account Ownership Structure

An endorsement of advice or performance that requires specified disclosures, including that future success is not guaranteed.

See also: Fair and balanced standard

Study this card Source: FINRA Rule 2210(d)(6)

Limited execution authority over when or at what price to trade a customer-specified security and amount; special duration rules apply.

See also: Discretionary account

Study this card Source: FINRA Rule 3260 - (d)(1)

The expected period an investor plans to hold investments before needing the money for a goal.

See also: Liquidity needs

Study this card Source: SEC Beginners Guide to Asset Allocation - Asset Allocation 101 - Time Horizon

A brief offering notice limited to facts permitted by Rule 134, rather than the full statutory prospectus.

Also called: Tombstone ad

See also: Statutory prospectus

Study this card Source: 17 CFR 230.134(a)

A fund's relative performance position based on total return, with accompanying period comparisons required by Rule 2212.

See also: Yield ranking

Study this card Source: FINRA Rule 2212(d)(2)(B)

A written transaction notice providing required execution details and disclosures, generally sent at or before completion.

See also: Customer account statement

Study this card Source: SEC 17 CFR 240.10b-10 - (a)

The day an order to buy or sell a security is executed.

See also: Settlement date

Study this card Source: FINRA Understanding Settlement Cycles - Opening paragraph

A personal retirement arrangement with potentially deductible contributions and generally tax-deferred growth.

See also: Roth IRA

Study this card Source: IRS Individual Retirement Arrangements - Types of IRAs

Firm, often a bank or trust company, that records changes of security ownership and maintains the issuer's security holder records.

See also: Depository Trust Company

Study this card Source: SEC Investor.gov: Market Participants - Transfer Agents

A permitted reason for not validating an account transfer, such as mismatched account identity or missing authorization.

See also: Transfer instruction form

Study this card Source: FINRA Rule 11870 - (d)(3)

The customer's authorized direction to move all or designated account assets between brokers.

Also called: TIF

See also: Automated Customer Account Transfer Service

Study this card Source: FINRA Rule 11870 - (a)(3), (b)(1)

An arrangement naming who receives eligible account assets at the owner's death, while the owner retains lifetime control.

Also called: TOD

See also: Individual account

Study this card Source: FINRA Plan Now to Smooth the Transfer of Your Brokerage Account Assets on Death - Is a TOD Plan Right for You

Short-term federal debt usually sold at a discount, occasionally at face value, and repaid at face value at maturity.

Also called: T-bill

See also: Treasury note

Study this card Source: TreasuryDirect About Treasury Marketable Securities - Types

Long-term federal debt offered with 20- or 30-year terms and semiannual interest payments.

Also called: T-bond

See also: Treasury note

Study this card Source: TreasuryDirect About Treasury Marketable Securities - Types

Two-year federal debt paying quarterly interest that varies with 13-week Treasury bill discount rates.

Also called: Treasury FRN

See also: Floating-rate bond

Study this card Source: TreasuryDirect About Treasury Marketable Securities - Types

Federal debt whose principal adjusts with changes in the Consumer Price Index.

Also called: TIPS

See also: Treasury bond

Study this card Source: TreasuryDirect About Treasury Marketable Securities - Types

Federal debt issued for two through ten years, with interest paid every six months.

Also called: T-note

See also: Treasury bond

Study this card Source: TreasuryDirect About Treasury Marketable Securities - Types

Separately traded interest and principal components of eligible Treasury securities, providing zero-coupon investments.

Also called: Separate Trading of Registered Interest and Principal of Securities

See also: Zero-coupon bond

Study this card Source: TreasuryDirect About Treasury Marketable Securities - Types

Assets held and managed by a trustee for beneficiaries according to the trust's terms.

See also: Trustee

Study this card Source: FINRA Investment Accounts - Trusts

An adult the firm may contact about account concerns; designation alone does not grant trading authority.

Also called: Trusted contact

See also: Power of attorney

Study this card Source: SEC Investor.gov Trusted Contacts - Can a trusted contact act on your behalf

The person or entity responsible for holding and administering trust assets for beneficiaries.

See also: Trust account

Study this card Source: FINRA Investment Accounts - Trusts

A direct movement of IRA assets between financial institutions, avoiding receipt by the owner and the IRA rollover-frequency limit.

See also: IRA one-rollover-per-year rule

Study this card Source: IRS Rollovers of Retirement Plan and IRA Distributions - How do I complete a rollover - 2; Direct transfers

How often account securities are replaced; one factor FINRA lists in judging whether trading was excessive.

See also: Excessive trading, Cost-equity ratio

Study this card Source: FINRA Rule 2111, Supplementary Material .05(c)

Account formed by two or more firms to buy securities from an issuer and distribute them.

Also called: Syndicate

See also: Firm commitment underwriting, Priority provisions

Study this card Source: MSRB Rule G-11(a)(viii)

A registered investment company generally holding a fixed portfolio, issuing redeemable units, and ending on a specified date.

Also called: UIT

See also: Mutual fund

Study this card Source: SEC Investor.gov Unit Investment Trusts - Distinguishing characteristics

A custodial arrangement holding an irrevocable gift for a minor without creating a formal trust.

Also called: Custodial account

See also: Custodian

Study this card Source: FINRA Regulatory Notice 20-07 - Background and Discussion

Shares with a low price-to-earnings ratio that investors may consider undervalued.

See also: Growth stock

Study this card Source: SEC Investor.gov Stocks - What are stocks; What kinds of stocks are there

An insurance contract with investment options whose performance affects account value; the owner can lose principal.

See also: Fixed annuity

Study this card Source: SEC Investor.gov Variable Annuities - What is a variable annuity; Can I lose money

An assumed-return demonstration of how policy values work, rather than a forecast of investment results.

See also: Claims-paying ability

Study this card Source: FINRA Rule 2211(b)(5)

Life coverage with cash value affected by selected investments, combining a death benefit with market risk.

See also: Variable policy lapse

Study this card Source: SEC Investor.gov Variable Life Insurance - What is variable life insurance

Termination when policy value is insufficient to meet required charges, potentially leaving no death benefit.

See also: Variable life insurance

Study this card Source: SEC Investor.gov Variable Life Insurance - Premiums

Clear labeling of a contract as variable life insurance or a variable annuity, without portraying it as a mutual fund.

See also: Variable product liquidity disclosure

Study this card Source: FINRA Rule 2211(a)(1)

An explanation balancing access claims with early-withdrawal charges, potential tax penalties, and possible principal loss.

See also: Claims-paying ability

Study this card Source: FINRA Rule 2211(a)(2)

Ownership of retirement benefits that cannot be forfeited; an employee's own plan contributions are always fully owned.

See also: Employer matching contribution

Study this card Source: IRS Retirement Topics Vesting - Employee contributions; Employer contributions

A loss sale paired with acquisition of substantially identical securities within 30 days before or after; loss-deduction rules apply.

See also: Capital loss

Study this card Source: SEC Investor.gov Wash Sales - Definition

Current assets minus current liabilities.

See also: Balance sheet, Current assets

Study this card Source: SEC Beginners' Guide to Financial Statements

A written grievance about a firm's or representative's securities or customer-funds activities, including one from an authorized agent.

See also: Complaint record retention

Study this card Source: FINRA Rule 4513 - (a)-(b)

The documented Firm Element program a member develops from its annual training assessment and uses to administer education.

See also: Firm Element needs analysis

Study this card Source: FINRA Rule 1240(b)(2)(A)-(C)

A fund comparison based on current SEC standardized yield, accompanied by required total-return rankings.

See also: Total-return ranking

Study this card Source: FINRA Rule 2212(d)(2)(C)

Debt making no periodic interest payments, typically bought below the amount repaid at maturity.

See also: Treasury STRIPS

Study this card Source: SEC Investor.gov Corporate Bonds - Basic types; Bankruptcy priority

An ongoing fund-asset charge covering distribution and sometimes shareholder-service costs.

See also: Expense ratio

Study this card Source: SEC Mutual Fund and ETF Fees and Expenses Investor Bulletin - Annual Fund Operating Expenses

An employer defined contribution plan allowing workers to defer pay into retirement accounts under the plan's terms.

See also: Elective deferral, Employer matching contribution

Study this card Source: IRS Retirement Plans Definitions - 401(k) plan

A retirement arrangement for public schools and certain tax-exempt employers, often using annuity contracts or mutual funds.

Also called: Tax-sheltered annuity plan; TSA plan

See also: 401(k) plan

Study this card Source: IRS 403(b) Tax-Sheltered Annuity Plans - Overview

The person opening an education savings or prepaid tuition account for a beneficiary.

Also called: 529 account owner

See also: 529 beneficiary

Study this card Source: SEC Introduction to 529 Plans - What is a 529 plan

The person for whose education a 529 account is opened; this may be the account holder.

See also: 529 account holder

Study this card Source: SEC Introduction to 529 Plans - What is a 529 plan

A tax-advantaged education savings arrangement sponsored by a state, agency, or eligible educational institution.

Also called: Qualified tuition plan

See also: Education savings plan, Prepaid tuition plan

Study this card Source: SEC An Introduction to 529 Plans Investor Bulletin - Introduction

A reminder to consider whether a home-state plan offers benefits available only through that state's program.

See also: Municipal securities advertisement

Study this card Source: MSRB Rule G-21(e)(i)(A)(2)(b)

The dealer's municipal-fund trade notice showing required details, including total purchase or redemption amount and share quantity.

See also: Municipal fund security, Trade confirmation

Study this card Source: MSRB Rule G-15 - (a)(i)(A)(3)(b), (7)(c)

An eligible distribution paid to the individual and redeposited into an eligible retirement account within the applicable deadline.

Also called: Indirect rollover

See also: Direct rollover

Study this card Source: IRS Rollovers of Retirement Plan and IRA Distributions - How do I complete a rollover - 3