Stock Broker Securities Regulations & Compliance 3

Question 1

A broker-dealer must file a Form U4 with FINRA when a registered representative does which of the following?

Accepted Answer

Is subject to a customer complaint or regulatory action

Answer

Opens a personal brokerage account

Answer

Changes their home address only

Answer

Requests a pay raise

Question 2

Under SEC Regulation S-P, broker-dealers must provide customers with privacy notices describing how the firm handles which type of information?

Accepted Answer

Non-public personal information

Answer

Publicly available information

Answer

Insider trading tips

Answer

Market research reports

Question 3

What is the purpose of FINRA Rule 3110, which requires member firms to establish supervisory systems?

Accepted Answer

To detect and prevent violations of securities laws and firm policies

Answer

To ensure firms generate profits

Answer

To limit the number of trades per day

Answer

To set minimum account balance requirements

Question 4

Which regulation governs the extension of credit by broker-dealers to customers purchasing securities on margin?

Accepted Answer

Regulation T

Answer

Regulation D

Answer

Regulation S

Answer

Regulation M

Question 5

A broker who front-runs a large customer order by trading for his own account first is violating which prohibition?

Accepted Answer

Front-running prohibition under FINRA Rule 5270

Answer

Short-selling rules

Answer

Regulation SHO

Answer

SEC Rule 144

Question 6

Under FINRA Rule 2010, members must observe 'high standards of commercial honor and just and equitable principles of trade,' which is also known as what?

Accepted Answer

The just-and-equitable rule or standards of commercial honor

Answer

The fiduciary duty rule

Answer

The best execution rule

Answer

The suitability rule