FINRA Industry Regulations 2

Question 1

Under FINRA Rule 4512, how long must a broker-dealer retain customer account records?

Accepted Answer

6 years

Answer

FINRA Rule 4512 requires customer account records to be retained for at least 6 years.

Question 2

Which FINRA rule governs the supervision of registered persons and requires written supervisory procedures (WSPs)?

Accepted Answer

Rule 3110

Answer

FINRA Rule 3110 requires firms to establish and maintain a system to supervise the activities of registered persons, including written supervisory procedures.

Question 3

A broker-dealer's net capital falls below the required minimum. Under SEC Rule 15c3-1, the firm must:

Accepted Answer

Cease opening new accounts and notify regulators immediately

Answer

When net capital falls below the required minimum, the firm must immediately cease opening new accounts and promptly notify FINRA and the SEC.

Question 4

Under FINRA Rule 2111 (Suitability), which of the following is NOT one of the three main suitability obligations?

Accepted Answer

Temporal suitability

Answer

The three suitability obligations under Rule 2111 are reasonable-basis, customer-specific, and quantitative suitability; temporal suitability is not a recognized category.

Question 5

Which regulatory body has primary authority over municipal securities dealers and their associated persons?

Accepted Answer

MSRB

Answer

The Municipal Securities Rulemaking Board (MSRB) has primary rulemaking authority for municipal securities dealers, though FINRA enforces those rules for broker-dealers.

(FINRA) FINRA Exams Practice Test

(FINRA) FINRA Exams Practice Test

FINRA Industry Regulations 2