FINRA Quality Assurance and Improvement 2

Question 1

Under FINRA Rule 3110, which of the following best describes the 'inspection' requirement for branch offices?

Accepted Answer

OSJs must be inspected at least annually and non-OSJ branches on a regular periodic schedule

Answer

FINRA Rule 3110 requires OSJs to be inspected at least annually, while non-OSJ branches must be inspected on a regular periodic schedule based on risk.

Question 2

A firm's internal audit discovers that a registered representative has been consistently recommending unsuitable investments. Which quality improvement action should the firm take FIRST?

Accepted Answer

Conduct a supervisory review and implement corrective action while preserving evidence

Answer

The firm must first conduct an internal supervisory review, take corrective action, and preserve evidence before determining next steps such as termination or regulatory reporting.

Question 3

What is the primary purpose of a 'gap analysis' in the context of FINRA quality assurance programs?

Accepted Answer

Identifying differences between current supervisory practices and regulatory requirements

Answer

A gap analysis compares a firm's existing supervisory and compliance practices against regulatory requirements to identify deficiencies that need remediation.

Question 4

Which metric is MOST relevant for assessing the effectiveness of a firm's complaint handling process under FINRA standards?

Accepted Answer

Average time to resolve complaints and rate of repeat complaints

Answer

Resolution time and repeat complaint rates indicate whether the complaint handling process actually addresses root causes and improves customer outcomes.

Question 5

A firm implements a new electronic surveillance system to monitor registered representative communications. Under quality assurance best practices, what should the firm do after implementation?

Accepted Answer

Conduct periodic testing to verify the system is capturing and flagging communications as intended

Answer

Quality assurance requires periodic testing and validation of surveillance systems to ensure they are functioning as intended and capturing required communications.

(FINRA) FINRA Exams Practice Test

(FINRA) FINRA Exams Practice Test

FINRA Quality Assurance and Improvement 2