CSCP Regulatory Reporting & Disclosures Flashcards

Under FINRA Rule 2210, what category of communication requires prior principal approval before use or filing?

Answer: Retail communications

Retail communications under FINRA Rule 2210 must be approved by a registered principal before first use, given the potential for broad public impact.

A broker-dealer discovers it has a net capital deficiency. Under SEC Rule 15c3-1, what must the firm do immediately?

Answer: Cease conducting business and notify the SEC and its designated examining authority

A net capital deficiency is a critical violation requiring immediate cessation of business and prompt notification to the SEC and the firm's designated examining authority.

What is the purpose of SEC Form 8-K?

Answer: Current reporting of material corporate events on a timely basis

Form 8-K is used by public companies to report material events or corporate changes to shareholders and the SEC on a current, timely basis.

Under FINRA's reportable event rules, which of the following requires a firm to file a Disclosure Event on the CRD system via Form U4?

Answer: A felony charge filed against the registered person

FINRA requires that criminal charges, including felony charges, be disclosed on Form U4 and reported on CRD regardless of final disposition.

Which SEC regulation governs the disclosure of executive compensation in proxy statements for public companies?

Answer: Regulation S-K, Item 402

SEC Regulation S-K Item 402 sets detailed requirements for executive compensation disclosure in proxy statements, including salary, bonuses, equity awards, and other benefits.

FINRA Rule 4511 requires member firms to preserve books and records. What is the minimum retention period for general ledger records?

Answer: 6 years

FINRA Rule 4511 and SEC Rule 17a-4 require that general ledger records be maintained for at least 6 years.