Practice Quiz

FINRA Series 7

Category - Series 7

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A registered bond with “Happy Birthday” scrawled across the face of the certificate is delivered to a broker/dealer in satisfaction of sale by another member firm. Assuming it is accompanied by an authentic assignment, power of substitution form, and tax stamps (if appropriate), this is good delivery only if:
  1. the certificate is validated by the transfer agent
  2. the certificate is validated by the registered owner
  3. the marking did not cover the name of the registered owner or the principal amount of the bond
  4. this is not a good delivery under any circumstances
Explanation
Answer: A - the certificate is validated by the transfer agent. A mutilated bond must be validated before it can be a good delivery. The validation can be made by the issuer or the transfer agent.
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