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FINRA SERIES 10 EXAM STUDY GUIDE
2025/2026 ACCURATE QUESTIONS AND
VERIFIED CORRECT SOLUTIONS WITH
RATIONALES || 100% GUARANTEED PASS
<RECENT VERSION>
According to MSRB rules, to be considered to be "regular way" settlement -
(ANSWER)Settlement date is trade date plus three business days. Regular way
settlement for municipal bond transactions is Trade date plus 3 business days
(T+3).
Muni Firm has a control relationship with an issuer for which it is distributing a
new issue. RR wants to sell some of the securities to a discretionary client but the
client cannot be reached. What can the RR do with regard to executing the
transaction - (ANSWER)The RR may not execute the transaction until the
customer can be contacted
When there is a control relationship between an issuer and a broker/dealer, the
customer must: - (ANSWER)the customer must be made aware of the
relationship and approve the trade prior to executing a transaction
A broker-dealer is inspected by FINRA on a 4-year cycle. Which records must be
retained covering this entire period - (ANSWER)Articles of Incorporation
Articles of incorporation must be retained for the life of the firm. - (ANSWER)
,2
In a principal transaction, the MSRB requires that the price given to the customer
consider the dealer's - (ANSWER)best judgment of the security's fair market
value; the fact that the dealer is entitled to a profit; the expenses associated with
handling the transaction; and the total dollar amount of the transaction.
For agency transaction, the MSRB requires that the availability of the security be
considered (a "hard to find" security justifies a higher commission); - (ANSWER)as
well as the expense of executing the order, the value of services rendered by the
broker; and the amount of any other compensation received by the broker in that
transaction.
A General Sales Supervisor has worked for a broker-dealer for 11 years. He
becomes subject to statutory disqualification. Which statement is TRUE -
(ANSWER)This individual may be permitted to continue working provided the
employer member files a written application to FINRA in an Eligibility Proceeding
The Securities Exchange Act of 1934 lists the reasons why an individual associated
with a firm, or the firm itself, may be subject to "statutory disqualification" -
meaning that they cannot be involved in the securities business. These include
situations where the individual or member firm: - (ANSWER)has been suspended
or expelled from any other Self Regulatory Organization, either domestic or
foreign;
is the subject of an SEC order suspending or revoking registration or by his
conduct while associated with a firm has caused that firm's suspension or
expulsion;
willfully filed a false or misleading application or has omitted to state material
facts in the application;
,3
willfully violated federal securities or commodities laws, willfully aided, abetted,
counseled, commanded or procured such violations, or failed to supervise those
who commit such law violations;
has been convicted of any securities or "money" related offense (such as
embezzlement) within the past 10 years; or
has been temporarily or permanently enjoined from engaging in the securities
business.
Generally speaking, a person subject to statutory disqualification may not be
associated with a member in any capacity. However, FINRA permits a disqualified
person to request permission to enter into, or remain in, the securities industry.
To do so, the member firm must file an application seeking approval of a new or
continued registration in an "Eligibility Proceeding."
The application is a package of all relevant information surrounding the
disqualification. FINRA looks at the nature and gravity of the event; the length of
time since the event occurred; any mitigating or aggravating circumstances; and
the disciplinary history of the member firm and associated person. If FINRA
approves an application, the SEC is also required to review and approve that
decision; and if FINRA denies an application, an appeal may be filed with the SEC.
Confirmation contents are regulated by MSRB Rule G15 and therefore, -
(ANSWER)cannot be changed by an agreement between Municipal Dealers.
A MFP was associated with Dealer A at the time he made a political contribution
which resulted in the dealer being prohibited from engaging in muni securities
business with the issuer for 2 years. Then, less than 2 years after making the
contribution, the MFP becomes associated with Dealer B. Which dealer(s) is
subject to the prohibition on engaging in muni business? - (ANSWER)Dealer A and
Dealer B. Both dealers are subject to the prohibition for two years from the date
, 4
of the contribution. Dealer B's probation only begins when the MFP joins Dealer
B.
All monies due as the result of a buy-in are due - (ANSWER)All monies are due as
a result of a buy in within 10 business days of execution
Which of the following branch functions can be outsourced to a third party
provider - (ANSWER)New account processing & New account customer I.D.
verification. Customer account processing & verification of customer identity are
functions that can be outsourced - there is no requirement for these to be
performed by a registered person.
FINRA does NOT allow functions that must be performed by a registered person
to be outsourced unless - (ANSWER)Unless the third party firm to whom the
functions are outsourced is itself a registered broker-dealer
New account approval must be performed by a registered principal and suitability
determinations can only be made by registered representatives (or registered
principals). - (ANSWER)
A customer has a NMFBA at your firm with $400,000 in assets. For the past 2
years, there has been no activity in the account and the customer has been
charged a $6,000 annual flat fee during each of those years for account
maintenance. As the BOM, you should - (ANSWER)Non-Managed Fee Based
Accounts (NMFBAs) are typically only suitable for active traders. This customer is
paying a very high annual fee for very little trading. The best answer is that the
BOM should have the representative discuss the situation with the customer and
explain the differences between maintaining the account as a NMFBA or
FINRA SERIES 10 EXAM STUDY GUIDE
2025/2026 ACCURATE QUESTIONS AND
VERIFIED CORRECT SOLUTIONS WITH
RATIONALES || 100% GUARANTEED PASS
<RECENT VERSION>
According to MSRB rules, to be considered to be "regular way" settlement -
(ANSWER)Settlement date is trade date plus three business days. Regular way
settlement for municipal bond transactions is Trade date plus 3 business days
(T+3).
Muni Firm has a control relationship with an issuer for which it is distributing a
new issue. RR wants to sell some of the securities to a discretionary client but the
client cannot be reached. What can the RR do with regard to executing the
transaction - (ANSWER)The RR may not execute the transaction until the
customer can be contacted
When there is a control relationship between an issuer and a broker/dealer, the
customer must: - (ANSWER)the customer must be made aware of the
relationship and approve the trade prior to executing a transaction
A broker-dealer is inspected by FINRA on a 4-year cycle. Which records must be
retained covering this entire period - (ANSWER)Articles of Incorporation
Articles of incorporation must be retained for the life of the firm. - (ANSWER)
,2
In a principal transaction, the MSRB requires that the price given to the customer
consider the dealer's - (ANSWER)best judgment of the security's fair market
value; the fact that the dealer is entitled to a profit; the expenses associated with
handling the transaction; and the total dollar amount of the transaction.
For agency transaction, the MSRB requires that the availability of the security be
considered (a "hard to find" security justifies a higher commission); - (ANSWER)as
well as the expense of executing the order, the value of services rendered by the
broker; and the amount of any other compensation received by the broker in that
transaction.
A General Sales Supervisor has worked for a broker-dealer for 11 years. He
becomes subject to statutory disqualification. Which statement is TRUE -
(ANSWER)This individual may be permitted to continue working provided the
employer member files a written application to FINRA in an Eligibility Proceeding
The Securities Exchange Act of 1934 lists the reasons why an individual associated
with a firm, or the firm itself, may be subject to "statutory disqualification" -
meaning that they cannot be involved in the securities business. These include
situations where the individual or member firm: - (ANSWER)has been suspended
or expelled from any other Self Regulatory Organization, either domestic or
foreign;
is the subject of an SEC order suspending or revoking registration or by his
conduct while associated with a firm has caused that firm's suspension or
expulsion;
willfully filed a false or misleading application or has omitted to state material
facts in the application;
,3
willfully violated federal securities or commodities laws, willfully aided, abetted,
counseled, commanded or procured such violations, or failed to supervise those
who commit such law violations;
has been convicted of any securities or "money" related offense (such as
embezzlement) within the past 10 years; or
has been temporarily or permanently enjoined from engaging in the securities
business.
Generally speaking, a person subject to statutory disqualification may not be
associated with a member in any capacity. However, FINRA permits a disqualified
person to request permission to enter into, or remain in, the securities industry.
To do so, the member firm must file an application seeking approval of a new or
continued registration in an "Eligibility Proceeding."
The application is a package of all relevant information surrounding the
disqualification. FINRA looks at the nature and gravity of the event; the length of
time since the event occurred; any mitigating or aggravating circumstances; and
the disciplinary history of the member firm and associated person. If FINRA
approves an application, the SEC is also required to review and approve that
decision; and if FINRA denies an application, an appeal may be filed with the SEC.
Confirmation contents are regulated by MSRB Rule G15 and therefore, -
(ANSWER)cannot be changed by an agreement between Municipal Dealers.
A MFP was associated with Dealer A at the time he made a political contribution
which resulted in the dealer being prohibited from engaging in muni securities
business with the issuer for 2 years. Then, less than 2 years after making the
contribution, the MFP becomes associated with Dealer B. Which dealer(s) is
subject to the prohibition on engaging in muni business? - (ANSWER)Dealer A and
Dealer B. Both dealers are subject to the prohibition for two years from the date
, 4
of the contribution. Dealer B's probation only begins when the MFP joins Dealer
B.
All monies due as the result of a buy-in are due - (ANSWER)All monies are due as
a result of a buy in within 10 business days of execution
Which of the following branch functions can be outsourced to a third party
provider - (ANSWER)New account processing & New account customer I.D.
verification. Customer account processing & verification of customer identity are
functions that can be outsourced - there is no requirement for these to be
performed by a registered person.
FINRA does NOT allow functions that must be performed by a registered person
to be outsourced unless - (ANSWER)Unless the third party firm to whom the
functions are outsourced is itself a registered broker-dealer
New account approval must be performed by a registered principal and suitability
determinations can only be made by registered representatives (or registered
principals). - (ANSWER)
A customer has a NMFBA at your firm with $400,000 in assets. For the past 2
years, there has been no activity in the account and the customer has been
charged a $6,000 annual flat fee during each of those years for account
maintenance. As the BOM, you should - (ANSWER)Non-Managed Fee Based
Accounts (NMFBAs) are typically only suitable for active traders. This customer is
paying a very high annual fee for very little trading. The best answer is that the
BOM should have the representative discuss the situation with the customer and
explain the differences between maintaining the account as a NMFBA or
