FINRA Cheat Sheet 2026

The 30 highest-yield FINRA facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. What should a FINRA professional do when facing a conflict of interest? → Disclose the conflict and recuse if necessary
2. Under Regulation T, the initial margin requirement for purchasing equity securities is: → 50%
3. Which of the following transactions is exempt from registration requirements under the Securities Act of 1933? → A private placement under Regulation D Rule 506(b) to accredited investors
4. A customer states she has a 'moderate' risk profile but her portfolio consists entirely of speculative penny stocks. What must a registered representative do? → Reassess suitability and discuss the inconsistency with the customer
5. What does 'short selling' involve? → Borrowing securities to sell them, with the obligation to buy them back later
6. A customer in the 32% federal tax bracket purchases a municipal bond yielding 4.5%. What is the taxable equivalent yield? → 6.62%
7. Under the USA, the statute of limitations for a civil action based on a securities violation is: → 2 years from discovery or 3 years from the violation, whichever comes first
8. What does the term 'nominal yield' refer to in fixed income securities? → The coupon rate stated on the face of the bond
9. What is a General Securities Representative allowed to trade? → Stocks, bonds, mutual funds, and options
10. Under FINRA's suitability rule (Rule 2111), which of the following is NOT one of the three main suitability obligations? → Portfolio-level suitability
11. What does 'par value' mean in the context of a fixed income security? → The face value at which the bond will be redeemed at maturity
12. What is the 'coupon rate' of a bond? → The annual interest rate paid on the bond's face value
13. Under MSRB Rule G-17, a municipal securities dealer must deal fairly with all persons and not engage in: → Deceptive, dishonest, or unfair practices
14. Which of the following is NOT a characteristic of a money market instrument? → High potential for capital appreciation
15. What is a key requirement for securities agents under the Uniform Securities Act? → State registration
16. A firm uses a 'three lines of defense' model for quality assurance. Which of the following correctly describes the SECOND line of defense? → Compliance and risk management functions that oversee and monitor the first line
17. A customer's complaint alleges sales practice abuse. Under FINRA Rule 4513, how long must the member firm retain records of the complaint and its resolution? → 6 years
18. FINRA Rule 4511 requires member firms to preserve most broker-dealer records for a minimum of how many years? → 6 years
19. Which type of municipal bond is backed solely by the full faith, credit, and taxing power of the issuing municipality? → General obligation bond
20. What is the 'premium' of an options contract? → The price paid by the buyer to the seller for the rights granted by the option
21. Which regulatory body oversees General Securities Representatives? → FINRA
22. Which of the following best describes an options 'straddle'? → Simultaneously buying a call and a put with the same strike price and expiration
23. What is mandatory reporting? → A legal obligation to report certain situations such as abuse or neglect
24. A state securities administrator may deny registration of a broker-dealer if the firm's principals: → Have been convicted of a securities-related felony within the past 10 years
25. A registered representative is assessing a client's risk tolerance for a new account. Which factor is LEAST relevant to this evaluation? → Current market index levels
26. Under FINRA Regulation Best Interest (Reg BI), broker-dealers must act in whose best interest when making a recommendation? → The retail customer at the time of the recommendation
27. Under the NASAA Model Rule on investment adviser recordkeeping, a state-registered investment adviser must generally retain books and records for a minimum of: → Five years
28. What is the main purpose of the Uniform Securities Act? → Regulate securities transactions at the state level
29. A registered investment adviser's principal is convicted of securities fraud in another state. The home-state administrator can: → Deny or revoke the adviser's registration based on the conviction
30. What is benchmarking in the context of quality improvement? → Comparing performance against best practices or industry standards