1|Page
Chapter 15: Self-Regulatory Organizations (SRO) Rules Questions
with 100% Correct Answers UPDATED!!!
Regarding arbitration agreements between member firms and
customers, which statement is true? - ANSWER Industry
arbitration is preferred over litigation as a means of settling
disputes because it is cheaper and faster.
FINRA does not require arbitration agreements between
customers and member firms. However, each member firm can
require this & usually does.
FINRA does require that if a customer signs a arbitration
agreement agreement as part of the account opening process,
then the customer must be sent a separate "stand alone" copy
of the agreement and must sign an acknowledgment of receipt
within 30 days of account opening.
NOTE: There is no requirement to resend the customer copy of
the arbitration agreement annually. Industry arbitration is
preferred over litigation as a means of settling disputes because
it is cheaper and faster.
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Every year a broker-dealer must provide all f the following to its
clients except: - ANSWER A pamphlet describing FINRA and
each of its regulations
Once every calendar year, member firms must provide each of
their customers in writing the following...
- the FINRA BrokerCheck hotline
- a statement describing the availability of an investor
ㅤㅤㅤbrochure that describes what a FINRA BrokerCheck is
- the FINRA website address
However, a broker-dealer is not required to SEND customers a
pamphlet describing FINRA and each of its regulations
A member can pay a commission for finding investors to each of
the following unregistered persons EXCEPT: - ANSWER US
citizens living in Japan
Foreign finders who are not registered can be paid a portion of
the commission, BUT both finder and the customer have to be
in foreign nationals (Non-US citizens) or foreign entities.
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When a registered person leaves the securities industry, FINRA's
jurisdiction over that person: - ANSWER Continues for 2 years
When a registered person leaves the securities industry, FINRA
retails jurisdiction over that person for 2 years. This means that
if the person becomes subject to a customer complaint or if
charges are brought against the person by FINRA, that person is
still subject to FINRA rules for the 2 years following their
departure.
Which of the following statements are accurate about customer
complaint records? - ANSWER Customer complaints records
must be preserved by the Office of Supervisory Jurisdiction
(OSJ) for 4 years, effective via FINRA Rule 4513. These records
must be preserved by the appropriate Office of Supervisory
Jurisdiction (OSJ) - either on-site OR in a place where they an be
made promptly available upon FINRA's request. The
appropriate Office of Supervisory Jurisdiction (OSJ) means that
they have received the complaint or the Office of Supervisory
Jurisdiction that supervises the branch received the complaint
Chapter 15: Self-Regulatory Organizations (SRO) Rules Questions
with 100% Correct Answers UPDATED!!!
Regarding arbitration agreements between member firms and
customers, which statement is true? - ANSWER Industry
arbitration is preferred over litigation as a means of settling
disputes because it is cheaper and faster.
FINRA does not require arbitration agreements between
customers and member firms. However, each member firm can
require this & usually does.
FINRA does require that if a customer signs a arbitration
agreement agreement as part of the account opening process,
then the customer must be sent a separate "stand alone" copy
of the agreement and must sign an acknowledgment of receipt
within 30 days of account opening.
NOTE: There is no requirement to resend the customer copy of
the arbitration agreement annually. Industry arbitration is
preferred over litigation as a means of settling disputes because
it is cheaper and faster.
,2|Page
Every year a broker-dealer must provide all f the following to its
clients except: - ANSWER A pamphlet describing FINRA and
each of its regulations
Once every calendar year, member firms must provide each of
their customers in writing the following...
- the FINRA BrokerCheck hotline
- a statement describing the availability of an investor
ㅤㅤㅤbrochure that describes what a FINRA BrokerCheck is
- the FINRA website address
However, a broker-dealer is not required to SEND customers a
pamphlet describing FINRA and each of its regulations
A member can pay a commission for finding investors to each of
the following unregistered persons EXCEPT: - ANSWER US
citizens living in Japan
Foreign finders who are not registered can be paid a portion of
the commission, BUT both finder and the customer have to be
in foreign nationals (Non-US citizens) or foreign entities.
, 3|Page
When a registered person leaves the securities industry, FINRA's
jurisdiction over that person: - ANSWER Continues for 2 years
When a registered person leaves the securities industry, FINRA
retails jurisdiction over that person for 2 years. This means that
if the person becomes subject to a customer complaint or if
charges are brought against the person by FINRA, that person is
still subject to FINRA rules for the 2 years following their
departure.
Which of the following statements are accurate about customer
complaint records? - ANSWER Customer complaints records
must be preserved by the Office of Supervisory Jurisdiction
(OSJ) for 4 years, effective via FINRA Rule 4513. These records
must be preserved by the appropriate Office of Supervisory
Jurisdiction (OSJ) - either on-site OR in a place where they an be
made promptly available upon FINRA's request. The
appropriate Office of Supervisory Jurisdiction (OSJ) means that
they have received the complaint or the Office of Supervisory
Jurisdiction that supervises the branch received the complaint
