Regulation Best Interest
FINRA Rules 2310, 2320, 2341, and 5110 each include provisions restricting the payment and receipt of non-cash compensation in connect with the sale and distribution of securities. In general, these rules limit non-cash compensation arrangements to gifts that do not exceed ________ in value.
100
At what time are broker-dealers and registered investment advisers required to deliver Form CRS to retail customers?
At the start of the relationship.
If a broker-dealer is required to comply with both Reg BI and Rule 2111 regarding a recommendation to a retail customer, compliance with Reg BI would result in compliance with Rule 2111. Why?
Because ALL broker-dealers are required to comply with both all the time.
SEC Reg BI is known as the ________; and FINRA Rule 2111 is known as the ________.
Best Interest Standard; Suitability Rule
SEC Reg BI's ________ Obligation requires broker-dealers to establish, maintain, and enforce written policies and procedures reasonably designed to identify and eliminate such things as sales contests, quotas and bonuses.
Conflict of Interest
The development and writing of Form CRS, Relationship Summary, is whose responsibility?
Individual firms
SEC Reg BI requires firms to keep a copy of each Form CRS issued for at least ________ after the Form was created.
My Best Answer: 6 years -6 hours -6 months -6 years -60 years
FINRA Rule 2111 identifies which three main suitability obligations?
Reasonable-basis, Customer-specific, and Quantitative suitability
Form CRS, Relationship Summary, must include all of the following EXCEPT?
The name and address of the agent
Form CRS, Relationship Summary, must include all of the following EXCEPT?
The name and address of the firm's CEO
Ralph is a broker-dealer. Does Ralph's firm have to maintain books and records of each date on which he provided a relationship summary to a prospective retail investor if the investor never becomes a customer?
Yes - There is no exception from the recordmaking requirements for delivering a relationship summary to prospective customers who do not ultimately open accounts or become customers.
Under SEC Reg BI in general, when considering recommendations of types of accounts, you should consider certain aspects. Which of the following would NOT be an aspect to consider?
Your commission
Given the many changes that are taking place in conjunction with the latest regulation updates, FINRA has issued a warning regarding fraudulent phishing emails, which contain a source domain name of "@________."
broker-finra.org
FINRA amended Rule 2111 to state that it will:
no longer apply to securities.
Among others, FINRA Rule 4512 defines "institutional account" as any person with total assets of at least:
$50 million.
The effective date of the revisions to NAIC Suitability in Annuity Transaction Model Regulation (#275) is:
June 30, 2020.
As set forth in Reg BI's explanation, to satisfy the Care Obligation, the broker-dealer will have to satisfy, at a minimum:
ALL of the elements of FINRA Rule 2111.
In addition to applying a best interest standard, SEC Reg BI contains new express elements for consideration when making recommendations to retail customers. Which of the following is CORRECT?
Care, Skill and Costs
FINRA Rule 2111's "customer-specific" obligation requires that a member or associated person have a reasonable basis to believe that the recommendation is suitable for a particular customer based on:
My Best Answer: that customer's investment profile. -the agent's need to meet his/her sales quota. -that customer's investment profile. -the insurance commissioner's sales guidelines. -the consumer's past investment experience.
Under SEC Reg BI when considering recommendations with regard to IRAs, you should consider certain additional aspects. Which of the following would NOT be an aspect to consider?
Your sales quota
The Compliance Obligation under SEC Reg BI applies solely to:
the broker-dealer entity.
If you are a dually registered financial professional who is making an account recommendation to a retail customer, whether Reg BI or the Advisers Act applies depends on which factor?
It will depend on the capacity in which you are making the recommendation.
The NAIC Suitability in Annuity Transaction Model Regulation (#275) includes a new best interest standard of care that producers and insurers can meet if they satisfy four requirements. Which of the following is NOT one of those requirements?
Return of Premium Obligation
Under SEC Reg BI when considering recommendations with regard to IRAs, you should consider certain additional aspects. Which of the following would NOT be an aspect to consider?
Your commission and sales quota
