11.4 communication with the public

Caleb Wilson receives an email from his client, Shelby Bogdin, requesting the year-to-date performance on several of her mutual funds. Wilson immediately looks up the performance and emails her a response. This type of communication would be classified as under FINRA rules as

correspondence

All of the following are true regarding customer account statements except

monthly statements need to be sent if the account activity is the receipt of interest or dividends.

All of these are true regarding correspondence except correspondence

must be filed with FINRA within 10 business days.

A customer of a broker-dealer purchases 100 shares of XYZ stock at $50 per share on Monday. Later that week, a confirmation arrives electronically indicating that the total cost of the transaction was $5,000. The client is puzzled that there is no additional charge for commission. The most likely reason for that is

the broker-dealer acted as a principal in the trade.

All of the following are provisions of Regulation S-P except

the firm must give the customer the opportunity to opt-out semiannually.

All of the following are provisions of FINRA's rules for holding mail for customers except

the firm must hold the customer's mail for up to three months if it receives notice in writing that it is for security reasons.

Registered representative Curt recently purchased a list of potential investors and plans to begin to cold call them soon. In addition to checking the national do-not-call list, Curt needs to consult

the firm's do-not-call list, and not call any number that appears on either list.

The TCPA only restricts solicitations that are delivered via

the telephone lines.

Which of the following would be a violation of FINRA rules regarding communication with the public?

A statement that the member firm is approved by FINRA

Which broker-dealers or investment advisers are obligated to maintain a business continuity plan?

All federally covered broker-dealers and investment advisers

All of the following are classifications of communications with the public except

sales literature.

In an effort to safeguard customer information which regulation specifies securing desktop and laptop computers and encrypting email?

Regulation S-P

To ensure that the information obtained from each new customer is accurate, firms must furnish to each customer a copy of the account record within how many days of opening the account?

30

A customer has just notified the brokerage firm of a change of address. How long does the broker-dealer have to provide the customer with an amended account record for confirmation?

30 calendar days

The TCPA requires that businesses that solicit by phone maintain a do-not-call registry that must be republished every

30 days.

Under the TCPA, solicitors must consult do-not-call lists that are no older than

30 days.

Once a customer account has been opened at a broker-dealer, rules require that updating information on the account record occur no less frequently than once every

36 months.

Solicitations may only occur between

8:00 am and 9:00 pm of the customer's time zone.

Under Regulation S-P, which of the following points are true regarding consumers?

A consumer performs a onetime transaction with the company.

Which of the following scenarios would not violate general standards regarding member firm communications?

A recruitment advertisement promises substantial training to be delivered to incoming employees.

Of the following, which would not be considered institutional communications with the public?

An internal memo promoting a new product that will be offered to your firm's institutional customers only

There are two types of do not call list. What are they and how long do names stay on the list?

Broker-dealer list and a national list; names remain on list until removed by customer

A registered representative sends a note to 22 prospective customers touting the value of investing in the Windmill Value Fund. This is an example of which of the following?

Correspondence

Which of the following is a classification of communications with the public?

Correspondence

A customer has requested that your broker-dealer hold mail for them while they are traveling. Which of the following is true?

Firms may choose or choose not to hold customer mail when requested to.

Regulation S-P defines consumers and customers with which of these statements? I. A customer has an ongoing relationship with the company. II. A consumer performs a onetime transaction with the company. III. A consumer has an ongoing relationship with the company. IV. A customer performs a onetime transaction with the company.

I and II

A customer leaves the sale proceeds from a recent transaction in the account. This amount would be considered I. a free credit balance. II. a margin debit balance. III. available to the customer at any time. IV. a loan to the broker-dealer, who will pay interest to the customer.

I and III

Under Rule 2210, institutional communication may require which of these? I. If pre-use principal approval is not required, the associate must have training on these communications II. A BD may require principal approval before use III. f principal approval is not required it must still be review by a principal after use IV. If principal review is not required, the associate must have a minimum of five years of experience

I, II, and III

Your firm must provide an account statement to a customer this month if I. five months have passed since the last activity in his account. II. there are penny stocks in the account. III. the account agreement states that statements are provided monthly. IV. some of the securities in the account have lost significant market value this month.

II and III

For each transaction, a customer must be sent or given a written confirmation of the trade at or before the completion of the transaction, the settlement date. Information on that trade confirmation would include I. the markup (markdown) charged on a principal transaction. II. the commission charged on an agency transaction. III. the number of bonds purchased in a bond trade. IV. the Committee on Uniform Securities Identification Procedures (CUSIP) number (if any).

II and IV

An individual is solicited with a cold call made by a registered representative. He tells the representative he is not interested in this investment or in making any future investments. Which of the following actions is required by the Telephone Consumer Protection Act of 1991 (TCPA)?

No calls may be made to the prospect by anyone at the firm.

Which broker-dealers or investment advisers are exempt from the requirement to maintain a business continuity plan (BCP)?

None

A registered representative wants to place advertisements in his daughters youth athletic league quarterly sponsorship booklet. He wants to convey in the weekly bulletin at his church that he specializes in retirement planning and 529 plans. Which of the following statements regarding these advertisements is true?

Pre-approval by a principal of the broker-dealer is required.

Trade confirmations must be provided to a customer no later than when?

Settlement day

You have a client, Hank Brown, who does much of his business overseas, and his assistant who is his sister, Allie Brown, often drops off checks at the branch for deposit in his individual account. Today Allie stopped by the office and said Hank forgot to sign some papers before he left and will be gone for three weeks. Because these are time-critical documents, Hank told her to have you sign them for him. Which of the following is true?

This would not be permitted. Hank will have to sign them when he gets back.

Financial Industry Regulatory Authority (FINRA) normally requires that member firms provide at least how many names as emergency contacts as a part of their business continuity plan (BCP)?

Two

Joshua, a registered representative, calls a prospect at 7:00 pm only to be told that the prospect is in a different time zone, where it is 10:00 pm. Joshua has

Violated the TCPA because it is after 9:00 pm the prospect's time

Joshua, a registered representative, calls a prospect at 7:00 pm only to be told that the prospect is in a different time zone, where it is 10:00 pm. Joshua has done which of these?

Violated the TCPA because it is after 9:00 pm the prospect's time

Firms are required to provide a copy of their business continuity plan (BCP) at which of the following times?

When requested

All FINRA firms must have business continuity plans. Those plans must include all of the following except A)prompt customer access to funds and securities if the firm is unable to continue business. B) data backup and recovery capability. C) the name of two emergency contact persons who are principals and members of senior management. D) a designated principal and member of senior management to conduct a quarterly review and update of the plan.

a designated principal and member of senior management to conduct a quarterly review and update of the plan.

Electronic delivery of documents requires all of the following except

a recording of the customer verbally agreeing to such receipt.

Regulation S-P requires that financial institutions provide information to customers and consumers concerning

all of these.

All FINRA firms must have business continuity plans. Those plans must include all of the following except A) alternate physical locations at least 100 miles apart in case of a disaster. B) alternate methods of communicating with customers. C) alternate methods of communicating with employees. D) methods of communicating with regulators.

alternate physical locations at least 100 miles apart in case of a disaster.

Communicating the information in a firm's BCP to customers occurs at all of the following times except

annually

A broker-dealer's business continuity plan (BCP) should be reviewed

annually by a principal of the firm.

The category of correspondence, one of the three identified as being communications with the public, is defined as

any written or electronic communication that is distributed or made available to 25 or fewer retail investors within any 30 calendar-day period.

Each of the following are likely to be found on a trade confirmation except

bond credit rating.

All of the following would be requirements of the Telephone Consumer Protection Act of 1991 except

contact each customer and ask if they wish to be put on the National Do Not Call Registry.

All of the following are exempt from the do not call provisions of the Telephone Consumer Protection Act except

calls made to make the customer aware of new products that are available to the customer.

In accordance with the terms of the Telephone Consumer Protection Act of 1991 (TCPA), all of the following statements are true except

cold calls may be made between 8:00 am and 9:00 pm in the time zone from which the representative is making the call.

Under regulation S-P, nonpublic personal information would not include a customer's

home address.

Under the Telephone Consumer Protection Act of 1991 (TCPA), administered by the Federal Communications Commission (FCC), a telephone solicitation is defined as a telephone call

initiated for the purpose of encouraging the purchase of, or investment in property, goods, or services.

Which of the following is not a category of communications with the public designated by Financial Industry Regulatory Authority (FINRA)?

market letters

When responding to regulatory requests for documents a broker-dealer

must comply with the request promptly.

A broker-dealer's business continuity plan (BCP) to be enacted in the event of a significant business disruption requires all of the following except

notification to regulators within one hour of the event.

A broker-dealer's customer will be relocating for a position with a higher salary and bonus potential. This requires

notification to the broker-dealer of the change within 30 days.

An institutional customer has requested that you provide an article that they can use in their quarterly retail client newsletter. Rule 2210 states that you must

obtain preapproval from a principal and file a copy with FINRA.

Under Rule 2210 the rules regarding correspondence include all of the following except

preapproval is always required.

Broker/dealers who reserve the right to disclose nonpublic private information about their customers to unaffiliated third parties must

provide notice to customers at the time of the account opening and provide reasonable means for customers to opt out of such disclosures.

Jackson Raleigh a registered representative in Memphis, TN, has a client that is a pension fund manager for the Tiger Pension Fund. Mr. Raleigh creates several flyers of informational literature about the funds available in the Tiger Pension Fund and emails them to the fund manager so that the fund manager can print copies of the flyers and make them available to the participants in the pension fund. Financial Industry Regulatory Authority (FINRA) would classify these flyers as

retail communications.

Jackson Raleigh, a registered representative in Memphis, TN, has a client who is a pension fund manager for the Tiger Pension Fund. Raleigh creates several flyers of informational literature about the funds available in the Tiger Pension Fund and emails them to the fund manager so that the fund manager can prints copies of the flyers and make them available to the participants in the pension fund. FINRA would classify these flyers as

retail communications.

Lilly Bogdin, a registered representative in the Norristown, PA, branch, creates a flyer for an upcoming seminar that she emails to all of her 150 clients. FINRA would classify this type of communications with the public as

retail communications.

All of the following would be considered as part of the general standards for all communication with the public except

statements that past performance is a good indication of future results.

For institutional communication the rule allows for either preapproval or review. However, if the firm allows the communication to go out before approval by a principal then

the associate must have training on these communications.

All of the following would require that updated account information be sent to the customer for confirmation within 30 days except

the account records system has been changed to a new format.

When making unsolicited cold calls to prospects, a registered representative must disclose all of the following to the individual called except

the address of any securities issuer mentioned during the call.

All member firm communications are held to certain standards by Financial Industry Regulatory Authority (FINRA). All of the following characterize those standards except

the nature of the audience (age, investment experience) need not be a consideration at an open seminar.

During a discussion with a customer about a potential investment opportunity involving securities, standing alone, all of the following would likely be permissible except

the registered representative points out only that a tech firm has a brilliant product idea and the CEO has advanced degrees in science.

Anyone making call cold calls for the firm must disclose all of the following information except

the rep's address or phone number.

Calls made regarding of all of the following under the Telephone Consumer Protection Act of 1991 (TCPA) are exempt except

those made that are unsolicited for the purpose of prospecting new clients.

Holding customer mail is consistent with your broker-dealer's in-house rules. Considering this, if requested to do so, the broker-dealer must

verify at reasonable intervals that the customer's instructions still apply.

Your firm must provide a privacy notice describing its privacy policies to customers

whenever a new account is opened and annually thereafter.

All of the following would be acceptable methods for the customer opting out of allowing the broker-dealer to share their nonpublic personal information except

writing a letter.