FINRA Communication and Documentation 3

Question 1

FINRA Rule 4511 requires member firms to preserve most broker-dealer records for a minimum of how many years?

Accepted Answer

6 years

Answer

2 years

Answer

3 years

Answer

10 years

Question 2

Which type of record must be kept readily accessible for the first two years of the required retention period under SEC Rule 17a-4?

Accepted Answer

All required records subject to the rule

Answer

Only trade confirmations

Answer

Only customer account records

Answer

Only compliance and supervisory records

Question 3

A customer disputes a trade that occurred four years ago. The firm's records from that period were destroyed two years into retention. Which statement best describes the firm's situation?

Accepted Answer

The firm has violated recordkeeping rules since most records must be kept six years

Answer

The firm is compliant since records older than two years may be destroyed

Answer

The firm is protected because the dispute is past the three-year statute of limitations

Answer

The firm can reconstruct records from customer statements without penalty

Question 4

Under FINRA rules, which document must be provided to a customer at or before the completion of a securities transaction?

Accepted Answer

A trade confirmation

Answer

A prospectus for all securities

Answer

An options disclosure document

Answer

A suitability assessment form

Question 5

A registered representative sends a text message to a client discussing a recommended trade. Under FINRA recordkeeping rules, this text message:

Accepted Answer

Must be retained as a business communication record

Answer

Is exempt from retention since it is a personal device communication

Answer

Only requires retention if the trade is over $10,000

Answer

Must be converted to email format before retention

Question 6

FINRA Rule 4370 requires firms to maintain written business continuity plans. Which element is NOT explicitly required in these plans?

Accepted Answer

Employee profit-sharing formulas

Answer

Data backup and recovery procedures

Answer

Alternate means of communication with customers

Answer

Annual review of the plan

Question 7

Under SEC Rule 17a-4, electronic records stored by broker-dealers must be maintained in a format that is:

Accepted Answer

Non-rewriteable and non-erasable (WORM format)

Answer

Encrypted and accessible only by compliance officers

Answer

Updated monthly to reflect current market conditions

Answer

Printed and stored in physical form as backup