Welcome to Processing and Confirming Transactions, the unit that covers what a firm needs before it can process a private placement trade, how that trade settles, what the confirmation sent to the customer must say, and a rule that protects a customer's right to move an account when a representative changes firms.
Exam Weight: 2 scored items within Function 4 (3 items / 6% of exam)
What You'll Learn
In this unit, you'll cover:
- Documents a Firm Needs Before Processing a Transaction: the accepted subscription agreement, the firm's own internal records, and a narrow exception that excuses the order memorandum itself
- Retention of the Subscription Agreement: which rule sets its retention period, and why that is not the same rule that names the document
- Payment Handling and Settlement of Private Placement Securities: why a private placement settles on the offering documents' terms rather than a clearing corporation's cycle, and where investor money sits until closing
- What a Transaction Confirmation Must Disclose: the delivery deadline and the full list of required content, from transaction identity through the debt-security add-ons
- Interfering With a Customer's Account Transfer: the prohibition on blocking a customer's account transfer after a representative's employment changes, and its one narrow exception
Why This Matters
Every private placement trade a representative helps arrange ends the same way: paperwork gets processed, funds move, and a confirmation goes out. The exam tests each of those steps as its own set of gradable facts, not as one general idea of "closing the deal."
The account-transfer rule closes the unit with a different kind of test: a protection that exists independent of any single trade, triggered by a representative's own move between firms.
Let's start with the documents a firm needs before processing a transaction.