Trading, Accounts & Prohibited ActsQuestion 246 of 398
FINRA's Know Your Customer rule requires a firm to use reasonable diligence to know the essential facts about every customer. The 'essential facts' are primarily those needed to do what?
a.Guarantee the customer a profit on every trade
b.Effectively service the account and comply with laws and firm policies
c.Sell the customer as many products as possible
d.Report the customer's spending to credit agencies
Explanation
Rule 2090 requires knowing the essential facts to effectively service the account, act on any special handling instructions, understand the authority of anyone acting for the customer, and comply with applicable laws and regulations. It works alongside the suitability rule.
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