FINRA Series 6 — All Questions

A firm has used a supervisory procedures manual since 2019 and replaces it with a new one on April 1, 2026. What is the earliest date it may destroy the old manual under Rule 17a-4?

• a.Today, since more than three years have passed since it was adopted in 2019
• b.Never, because manuals are kept for the life of the enterprise
• c.April 1, 2032, which is six years after the manual was last used by the firm
• d.April 1, 2029, which is three years after the manual stopped being used✓

Rule 17a-4(e)(7) requires each compliance, supervisory and procedures manual, with its updates, to be kept until three years after the termination of its use. The clock starts when use ends on April 1, 2026, so the date is April 1, 2029. Counting from adoption would discard it too soon, six years is a different category, and life of the enterprise applies to formation documents.17 CFR 240.17a-4(e)(7)

A firm generates an exception report that reviews customer accounts for unusual activity on February 1, 2026. What is the earliest date it may stop retaining that report under Rule 17a-4?

• a.February 1, 2032, which is six years after the report was run
• b.August 1, 2027, which is eighteen months after the report was run✓
• c.February 1, 2027, which is twelve months after the report was produced
• d.February 1, 2029, which is three years after the report was run

Rule 17a-4(e)(8) requires reports produced to review for unusual activity in customer accounts to be kept until eighteen months after the report was generated, and a firm may instead produce them promptly on a regulator's request. Eighteen months after February 1, 2026 is August 1, 2027. The twelve-month, three-year and six-year periods belong to other kinds of records or are not in the rule.17 CFR 240.17a-4(e)(8)

How long must a firm keep a copy of each Form CRS it creates?

• a.Until the customer's account closes, with no period afterward
• b.Until the next Form CRS update replaces it on the firm's website
• c.At least six years after it is created, easily accessible✓
• d.At least three years after it is created, with easy access throughout

Rule 17a-4(e)(10) requires a copy of each Form CRS, and the records required by Rule 17a-3(a)(24), to be kept at least six years after they are created, in an easily accessible place. Three years is the period for many other records, and neither account closing nor replacement by an updated form ends the retention period.17 CFR 240.17a-4(e)(10)

On Wednesday, October 14, 2026, a carrying firm receives a properly completed transfer instruction for a customer's account. By what date must the carrying firm validate the instruction or take exception to it?

• a.Thursday, October 15, one business day after receipt✓
• b.Wednesday, October 14, the day the instruction arrives
• c.Friday, October 16, two business days after receipt
• d.Monday, October 19, three business days after receipt

Rule 11870 requires the carrying member to validate a transfer instruction or take exception to it within one business day after receiving it. Receipt on Wednesday makes Thursday the deadline. Friday and Monday correspond to two- and three-business-day periods; three business days is the period for completing the transfer after validation, not for validating. Same-day action is quicker than the rule demands and is not the deadline.FINRA Rule 11870(b)

A carrying firm validates a customer's transfer instruction on Thursday, October 15, 2026, and takes no exception to it. By what date must it complete the transfer of the account assets?

• a.Wednesday, October 21, four days after validation
• b.Monday, October 19, two business days after validation
• c.Tuesday, October 20, the third business day after validation✓
• d.Friday, October 16, one business day after validation

Rule 11870 requires the carrying member to complete the transfer within three business days following validation. Counting from Thursday, October 15, Friday is the first business day, Monday the second and Tuesday the third. Monday is only two days, Friday matches the one-day validation period that has already been used, and Wednesday runs one day past the limit.FINRA Rule 11870(e)

A registered representative who joined a firm ten days ago telephones a customer she served at her prior firm to discuss moving the account. What must the new firm do under FINRA Rule 2273?

• a.Read the educational communication aloud during the call and keep a record of the reading, with no written delivery needed
• b.Mail the educational communication only after the customer returns signed transfer documents to the new firm's branch office
• c.Say orally that the communication will follow; send it within three business days or with transfer papers, if sooner✓
• d.Send the educational communication within ten business days of the call, whether or not transfer documents have been sent

When a recently hired representative contacts a customer of the prior firm by phone, Rule 2273 requires the new firm to say orally that an educational communication will follow and then deliver it within three business days or with the account transfer documents, whichever is earlier. Reading it aloud does not replace the delivery, waiting for signed documents can miss the earlier deadline, and ten business days is longer than the rule allows.FINRA Rule 2273

A representative joined a member firm on September 1. She contacts a former customer about moving the account on each date below. On which date is the firm still required to provide the Rule 2273 educational communication?

• a.December 15, about fifteen weeks after she started
• b.November 20, about eleven weeks after her start date✓
• c.January 12, about nineteen weeks after she started
• d.February 9, about twenty-three weeks after she started

Rule 2273 applies to contacts made during the first three months after the representative's start date. September 1 plus three months ends December 1, so only the November 20 contact is covered. The other three contacts all come after that period, so the rule does not require the educational communication for them.FINRA Rule 2273

A broker-dealer that is going out of business wants to move all of its retail accounts to another firm in bulk, but many customers cannot be reached for signatures. What consent approach does FINRA guidance say may be appropriate?

• a.No customer consent at all, since a firm leaving the business may assign its accounts as it sees fit
• b.A Rule 1017 membership application approved by FINRA, in place of any customer consent
• c.Affirmative consent from each customer, since negative consent is allowed only for single-account transfers
• d.Negative consent, used for bulk transfers only in limited situations such as a firm leaving the business✓

FINRA generally expects affirmative customer consent to transfer or assign an account, but Regulatory Notice 26-03 says negative consent may be appropriate in limited bulk situations where affirmative consent is unworkable, such as a firm going out of business. Moving accounts with no consent at all could conflict with the duty to observe high standards of commercial honor under Rule 2010. Negative consent is a bulk tool, and single-account transfers proceed under Rule 11870 on the customer's instruction. A Rule 1017 application concerns FINRA's approval of membership changes and does not replace customer consent.FINRA Regulatory Notice 26-03

Which of the following is a factor FINRA Rule 5310 lists for deciding whether a member used reasonable diligence to obtain the best market for a customer's order?

• a.The commission the firm expects to earn on the transaction
• b.The firm's own inventory position in the security at the time
• c.The customer's stated investment objective on the account form
• d.The number of markets the member checked for the order✓

Rule 5310(a)(1) lists the character of the market, the size and type of the transaction, the number of markets checked, the accessibility of the quotation, and the terms and conditions of the order. The firm's commission and inventory are firm-side interests, not listed factors, and the customer's investment objective belongs to suitability and best-interest analysis rather than the best execution factors.FINRA Rule 5310(a)(1)

A firm routes most customer orders to outside venues but fills a customer's market order from its own inventory. How must the firm review best execution for the order it filled internally?

• a.Through its quarterly regular and rigorous review, the same way it reviews the orders it routes out
• b.By relying on the execution statistics of the outside venues that handle its routed orders
• c.Order by order, because a regular and rigorous review alone does not cover orders the firm executes internally✓
• d.Through the order-routing disclosures it publishes each quarter under Rule 606 of Regulation NMS

Regulatory Notice 15-46 explains that a regular and rigorous review can satisfy best execution only for the decision whether to route an order and for orders routed outside the firm. Orders the firm decides to execute internally are subject to an order-by-order analysis. Rule 606 reports are disclosures, not an execution-quality analysis, and statistics from outside venues say nothing about fills the firm made itself.FINRA Rule 5310, Supplementary Material .09

A firm relies on regular and rigorous reviews of execution quality for orders it routes to other venues. At a minimum, how often must it conduct those reviews?

• a.Semiannually, in line with the firm's supervisory control testing
• b.Monthly, because the rule sets that minimum for equities
• c.Annually, together with its annual certification of compliance processes
• d.Quarterly, and more often if the firm's business calls for it✓

FINRA states that firms using a regular and rigorous review must conduct it at least quarterly, and Supplementary Material .09 adds that a firm should consider whether its business calls for more frequent reviews. Some firms review monthly, but monthly is a practice, not the rule's minimum. Semiannual and annual cycles are too infrequent.FINRA Rule 5310, Supplementary Material .09

A customer enters an unsolicited order and instructs the firm to route it to a particular market. The firm accepts the order and has access to that market. What is the firm's best execution duty?

• a.A full best execution analysis, overriding the instruction if another market shows a better price
• b.None beyond the instruction, but it must process the order promptly and under its terms✓
• c.It must reject the order, since a firm may not accept routing instructions from customers
• d.None at all, because the customer chose the venue and the firm may work the order when convenient

Under Supplementary Material .08, a firm handling an unsolicited directed order need not make a best execution determination about the market beyond the customer's instruction, but it still must handle the order promptly and according to its terms. Overriding the instruction would disregard what the customer directed. A firm is not obligated to accept directed orders, yet nothing prohibits accepting them.FINRA Rule 5310, Supplementary Material .08

A member could execute a customer's order directly with the best market but sends it through another broker-dealer as thanks for business that firm refers to the member. How does FINRA Rule 5310 treat this?

• a.As permitted, because a member may route an order to any registered broker-dealer it chooses to reward for referrals
• b.As prohibited interpositioning, because reciprocating for referrals does not justify placing a third party between the member and the market✓
• c.As permitted, because Rule 5310 applies only when the member acts as agent, not when it trades as principal
• d.As permitted, provided the firm records the referral arrangement in its written supervisory procedures and reviews it each year

Rule 5310 bars a member from interjecting a third party between itself and the best market in a manner inconsistent with the rule, and it says that channeling orders through a third party to reciprocate for service or business does not relieve the member of its obligations. Here the member could execute directly, so the narrow exception for a member that cannot execute directly does not apply. The obligations apply to principal transactions as well as agency ones. Documenting the arrangement and a general freedom to route do not change the result.FINRA Rule 5310(a)(2), (c)

A customer holds a good-til-canceled order to buy 200 shares of XYZ at $40.00, not marked Do Not Reduce. XYZ goes ex-dividend on a $0.375 cash dividend. At what price must the member enter the order for the ex-date?

• a.$39.62, reduced by $0.375 and rounded down to the next cent✓
• b.$40.00, because only the order's size changes for a cash dividend
• c.$39.63, reduced by $0.375 and rounded to the nearest cent
• d.$40.38, because the order is raised by the dividend and rounded up

Rule 5330(a)(1) reduces the price of an open buy order by the dollar amount of the cash dividend and then rounds the result down to the next lower minimum quotation variation. $40.00 less $0.375 is $39.625, which rounds down to $39.62. Rounding to the nearest cent gives $39.63, which the rule does not use. A cash dividend adjusts price, not size, and the adjustment lowers the price rather than raising it.FINRA Rule 5330(a)(1)

A customer has a good-til-canceled order to sell 300 shares of ABC at a limit of $55.00. ABC goes ex-dividend on a $0.50 cash dividend. How does FINRA Rule 5330 treat the order?

• a.The price is reduced to $54.50 on the ex-date, unless the customer marked the order Do Not Reduce
• b.The price is raised to $55.50 on the ex-date so the customer is made whole for the dividend
• c.The price stays at $55.00, because a sell limit is not an open order under the rule's definition✓
• d.The order is cancelled on the ex-date and the customer must reenter it if still wanted

Rule 5330(d) defines an open order as an order to buy or an open stop order to sell, so a sell limit order is not adjusted for a cash dividend. The reduction applies to buy orders and sell stop orders, which is why the Do Not Reduce marking matters for them. Raising the price would make a sell order harder to fill rather than compensate the customer. Cancellation is for reverse splits, not cash dividends.FINRA Rule 5330(d)

A customer holds a good-til-canceled order to buy 500 shares of a stock at $8.00. The company then completes a 1-for-10 reverse split. What does FINRA Rule 5330 require the member to do with the order?

• a.Leave it unchanged, since reverse splits are adjusted only for sell orders, not buy orders
• b.Cancel the order, since a pending order in a security that is reverse split must be cancelled✓
• c.Convert it to 50 shares at $80.00 so that the order keeps the same total dollar value
• d.Hold it for reconfirmation with the customer, then adjust it as it would for a forward split

Rule 5330(b) says that when a pending order involves a security that is the subject of a reverse split, the order, buy or sell, is cancelled. The member does not convert it, leave it alone, or adjust it as for a forward split. Reconfirmation with the customer is the procedure for a distribution whose value cannot be determined, which is a different situation.FINRA Rule 5330(b)

A customer has a good-til-canceled order to buy 300 shares of DEF at $60.00, with no Do Not Reduce or Do Not Increase instruction. DEF effects a 3-for-2 forward split. How must the order read after the ex-date?

• a.450 shares at $40.00 (size times 3/2 and price times 2/3)✓
• b.450 shares at $60.00 (size adjusted, but price left unchanged)
• c.300 shares at $40.00 (price adjusted, but size left unchanged)
• d.200 shares at $90.00 (size times 2/3, price times 3/2)

Rule 5330(a)(2) lowers the order price for a stock split and, unless marked Do Not Increase, raises the size by multiplying by the numerator and dividing by the denominator of the split ratio. Here 300 times 3 divided by 2 is 450 shares, and the price falls from $60.00 to $40.00. Leaving the size or the price unchanged ignores half of the adjustment, and applying the inverse ratio moves both in the wrong direction.FINRA Rule 5330(a)(2)

A customer's regular-way purchase of a listed stock is executed on Wednesday, November 25, 2026. Thursday, November 26, is Thanksgiving Day and the markets are closed. On what date does the trade settle?

• a.Monday, November 30, two business days after the trade date
• b.Friday, November 27, the next business day after the trade✓
• c.Tuesday, December 1, three business days after the trade date
• d.Thursday, November 26, one calendar day after the trade date

Regular-way settlement is the first business day following the trade date under Rule 15c6-1(a) and FINRA Rule 11320(b). Thanksgiving is not a business day, so the first business day after Wednesday is Friday. Counting Thursday treats the holiday as a business day. Monday is a T+2 date and Tuesday is a T+3 date, which are earlier settlement cycles no longer used for regular-way trades.17 CFR 240.15c6-1(a); FINRA Rule 11320(b)

A customer buys 100 shares of a listed stock in a cash account on Tuesday, October 13, 2026, and has not yet paid. Under Regulation T, by what date must the firm obtain full payment? No holidays fall in the period.

• a.Wednesday, October 14, the regular-way settlement date
• b.Monday, October 19, four business days after the purchase
• c.Thursday, October 15, the second business day after the purchase
• d.Friday, October 16, the third business day after the purchase✓

Regulation T requires full payment within one payment period of the purchase. The payment period is the number of business days in the standard settlement cycle plus two, and with a one-business-day cycle that is three business days. Counting from Tuesday, October 13, the third business day is Friday, October 16. Wednesday is the settlement date, but Regulation T allows two more business days, and Thursday and Monday do not match the three-day period.12 CFR 220.8(b)(1); 12 CFR 220.2

A customer buys stock in a cash account, sells it before paying for it, and does not pay within the payment period. Under Regulation T, what restriction follows?

• a.For the next 90 calendar days, the customer must pay in full by the trade date for any purchase✓
• b.For the next 90 calendar days, the account may be used only to close out the positions it already holds
• c.The account is converted to a margin account and must meet 50 percent initial margin
• d.For the next 30 calendar days, the customer must pay in full by the trade date on every purchase

Under Regulation T's 90-day freeze, when a security is sold without having been paid for in full, the privilege of delaying payment beyond the trade date is withdrawn for 90 calendar days after the sale. The 30-day version swaps the number. The closing-only limit is not part of the rule, and a cash account does not become a margin account automatically.12 CFR 220.8(c)(1)

A customer buys $9,000 of stock in a cash account and sends $8,250 by the end of the payment period. Under Regulation T, what may the firm do about the $750 shortfall?

• a.Liquidate the entire purchase, because Regulation T allows no shortfall after the period
• b.Disregard it only after its examining authority has approved an extension of the period
• c.Disregard it only if the customer deposits the balance within five business days
• d.Disregard it at its option, because a creditor may disregard an unpaid sum of $1,000 or less✓

Regulation T normally requires a creditor to cancel or liquidate a purchase that is not paid for in full in time, but section 220.8(b)(4) lets the creditor, at its option, disregard any sum due of $1,000 or less. A $750 shortfall falls under that limit, so no extension is needed and no further grace period applies. Liquidating the whole purchase is not required.12 CFR 220.8(b)(4)

A customer's check for a cash-account purchase will not clear before the payment period ends, and the firm wants more time. Who may extend the period, and when must the firm apply?

• a.The Federal Reserve Board, on an application the firm files within five business days after the payment period ends
• b.The firm's examining authority, on an application filed before the period ends for exceptional circumstances✓
• c.The firm's own principal, who may grant up to five business days with a supervisor's written approval
• d.The firm's examining authority, on an application the firm files within ten days after the period ends

Section 220.8(d) lets the creditor's examining authority extend the payment period on the creditor's application, unless it believes the creditor is not acting in good faith or has not sufficiently determined that exceptional circumstances warrant the extension. The application must be filed and acted on before the payment period ends, so one filed after the period is too late. The Federal Reserve Board does not grant these extensions, and a firm cannot extend the period for itself.12 CFR 220.8(d)(1)-(2)

A customer's margin purchase on Wednesday, October 14, 2026, creates a Regulation T margin deficiency. By what date must the customer satisfy the margin call? No holidays fall in the period.

• a.Monday, October 19, the third business day following the trade date✓
• b.Friday, October 16, the second business day following the trade date
• c.Tuesday, October 20, the fourth business day following the trade date
• d.Thursday, October 15, the first business day after the trade was executed

A Regulation T margin call must be satisfied within one payment period after the deficiency was created, and with a one-day settlement cycle the payment period is three business days. From Wednesday, October 14, the third business day is Monday, October 19. Thursday is only the settlement date, Friday is two days, and Tuesday is one day past the limit.12 CFR 220.4(c)(3)

A customer buys 400 shares of a listed stock at $62.50 in a margin account. Under Regulation T, what is the minimum initial margin?

• a.$37,500, equal to 150 percent of the purchase price, as for a short sale
• b.$25,000, equal to the full $25,000 purchase price of the shares
• c.$12,500, equal to 50 percent of the $25,000 purchase price of the 400 shares✓
• d.$6,250, equal to 25 percent of the $25,000 purchase price of the shares

Regulation T requires 50 percent of the current market value of a margin equity security, so a $25,000 purchase needs $12,500. Twenty-five percent is the usual maintenance level set by FINRA, not the Regulation T initial requirement. Full payment applies to a cash account or a nonmargin security, and 150 percent is the short sale requirement in section 220.12(c).12 CFR 220.12(a)

Under Regulation T, what initial margin applies to a customer's purchase of money market fund shares in a margin account?

• a.The amount the creditor requires in good faith, not a fixed percentage✓
• b.One hundred percent of current market value, since fund shares are nonmargin
• c.Fifty percent of the shares' current market value, as for other margin equity
• d.Twenty-five percent of the shares' current market value, the usual maintenance level

Section 220.12(b) sets the margin for an exempted security, a non-equity security or a money market mutual fund at the amount the creditor requires in good faith. The 50 percent requirement in section 220.12(a) excludes money market funds, the 100 percent requirement applies to nonmargin equity securities, and 25 percent is a maintenance concept rather than the Regulation T requirement.12 CFR 220.12(b)

A company declares a regular quarterly cash dividend, well under 25 percent of the stock's value, with a record date of Friday, October 16, 2026. Regular-way trades settle one business day following the trade date. What is the last trade date on which a buyer is entitled to the dividend?

• a.Thursday, October 15, the business day before the ex-dividend date✓
• b.Monday, October 19, the first business day after the record date
• c.Wednesday, October 14, two business days before the record date, the old cycle
• d.Friday, October 16, the record date and also the ex-dividend date

Under Rule 11140(b)(1), the ex-dividend date for a dividend of this size is the record date when that date is a business day, so the stock trades ex-dividend on Friday, October 16. The last cum-dividend purchase is therefore Thursday, October 15, which settles on the record date. Wednesday reflects the former two-day cycle, and buyers on Friday or Monday do not receive the dividend.FINRA Rule 11140(b)(1)

A member firm that sells mutual fund shares directly to retail customers receives a customer's order on Monday, October 5, 2026, and the customer's payment on Wednesday, October 7. By what end of day must the firm transmit the payment under FINRA Rule 2341(m)(1)?

• a.Friday, October 9, two business days after the payment arrives at the firm
• b.Wednesday, October 7, the former two business days after the order arrives
• c.Thursday, October 8, one business day after the payment arrives✓
• d.Tuesday, October 6, one business day after the order arrives

Rule 2341(m)(1), as amended for the one-day settlement cycle, requires transmittal by the end of one business day after receipt of the order or one business day after receipt of the payment, whichever is later. The payment came in later, so the deadline is Thursday. Tuesday is the earlier of the two measures, Wednesday reflects the former two-business-day period from the order, and Friday adds a day the rule does not allow.FINRA Rule 2341(m)(1)

A firm-commitment underwritten offering is priced at 6:00 p.m. ET on Tuesday, October 20, 2026. Absent an express agreement on another date, what is the latest date on which the cash contracts for the offered securities may provide for payment and delivery?

• a.Wednesday, October 21, one business day after the pricing
• b.Friday, October 23, three business days after the pricing
• c.Tuesday, October 27, five business days after the pricing
• d.Thursday, October 22, two business days after pricing✓

Rule 15c6-1(c) lets contracts for securities priced after 4:30 p.m. ET in a firm-commitment underwritten offering settle as late as the second business day after the contract date, rather than the first business day required by the general rule in paragraph (a). Tuesday evening pricing therefore allows settlement through Thursday. Wednesday is the ordinary one-day date and is not the latest, while Friday and Monday exceed the limit.17 CFR 240.15c6-1(c)

A firm sends a comparison for a trade that does not clear through a registered clearing agency, executed on Monday. By the end of Monday it has received no comparison, confirmation or signed Don't Know notice from the contra-member. When may the firm begin the Rule 11210 DK procedures?

• a.Only on the settlement date, after the contra-member has failed to deliver the securities
• b.At the end of Monday, because DK procedures may be used once the trade date ends with no response✓
• c.Immediately after execution, because a DK notice may go out before the contra-member responds
• d.At the close of Tuesday, one business day following the trade date, the threshold before T+1

As amended effective May 28, 2024 for the one-day settlement cycle, Rule 11210(c) lets the confirming member use the DK procedures if it receives no comparison, confirmation or signed DK from the contra-member by the end of the day on the trade date. The earlier threshold was the close of one business day following the trade date. Waiting for the settlement date is not what the rule says, and a DK notice is not available the moment the order is executed because the contra-member has until the end of the trade date to respond.FINRA Rule 11210(c)

A firm accepts a customer's delivery-versus-payment purchase order and executes it on Monday. By when must the firm give the customer a confirmation, or the data customarily on one, under FINRA Rule 11860(a)(3)?

• a.Within five business days, the same period that applies to periodic plan statements
• b.The settlement date, once the agent has received the securities or payment
• c.The close of business Tuesday, the next business day, as the rule read before T+1
• d.The end of the day on Monday, the trade date, rather than the next business day✓

Rule 11860(a)(3) was amended for the one-day cycle to require the confirmation, or its customary data, no later than the end of the day on the trade date. The prior rule allowed until the close of business on the next business day. Tying delivery to the agent's receipt of securities or payment, or borrowing the five-business-day period from periodic plan statements, has no basis in the rule.FINRA Rule 11860(a)(3)

A company declares a special cash distribution equal to 40 percent of its stock's value, with a record date of Friday, October 16 and a payable date of Friday, October 30, 2026. On what date does the stock begin trading ex-distribution?

• a.Friday, October 16, the record date for the distribution
• b.Friday, October 30, the payable date of the distribution
• c.Thursday, October 15, the last business day before the record date
• d.Monday, November 2, the first business day after the payable date✓

Rule 11140(b)(2) sets a different ex-date for distributions that are 25 percent or more of the security's value: the first business day following the payable date. That is Monday, November 2. The record date is the ex-date only under the normal rule in paragraph (b)(1) for smaller distributions, and the payable date itself is one day too early.FINRA Rule 11140(b)(2)

A customer alleges that a registered representative made unsuitable trades in her account and files a claim against the representative and the member firm with FINRA Dispute Resolution. Her account agreement has no arbitration clause. Must the member arbitrate?

• a.No, because the member is bound to arbitrate only when its account agreement contains a written arbitration clause
• b.Yes, because the customer requested arbitration and the dispute arises from the member's securities business✓
• c.No, because the member may insist on court unless it again consents in writing after the dispute arises
• d.Yes, but only after the customer first completes a mediation of the claim administered by FINRA

Rule 12200 requires arbitration of a dispute between a customer and a member or associated person that arises in connection with the member's business activities when the customer requests it, even if no pre-dispute clause exists. A written clause is one route to mandatory arbitration, not the only one. A post-dispute written agreement is the separate route under Rule 12201 and is not needed when the customer asks. Mediation is voluntary and is not a step the customer must complete first.FINRA Rule 12200

A customer files a FINRA arbitration claim against an associated person who is inactive when the claim is filed. When is the claim eligible for arbitration under the Customer Code?

• a.Only if the customer files the claim within 60 days after the person became inactive
• b.Only if the inactive person's former member firm consents to the use of the FINRA forum
• c.Always, because an associated person's status does not affect the customer's right to arbitrate
• d.Only if the customer agrees in writing to arbitrate after the claim arises✓

Under Rule 12202(a), a claim by or against a member or associated person who is inactive at the time of filing is ineligible unless the customer agrees in writing to arbitrate after the claim arises. The former firm's consent does not cure the defect, and inactive status does matter, so eligibility is not automatic. The 60-day figure comes from Rule 12202(b), which lets a customer withdraw a pending claim after a respondent becomes inactive during the case, not a filing deadline.FINRA Rule 12202(a)

A class action over alleged undisclosed fund fees is pending in federal court, and a putative class member has an account agreement with an arbitration clause. May the firm enforce the clause against that customer for the class claims?

• a.No, not until certification is denied, the class is decertified, or the customer is excluded or opts out✓
• b.Yes, once the firm gives the customer 30 days' written notice that it intends to invoke the clause
• c.Yes, because a pre-dispute arbitration clause in the account agreement governs any claim the customer holds
• d.No, because class members can never be required to arbitrate, even after the court denies certification

Rule 12204 bars arbitration of class action claims under the Code, and paragraph (d) says a member may not enforce an arbitration agreement against a member of a certified or putative class until certification is denied, the class is decertified, or the customer is excluded or elects not to participate. The clause does not override that rule, and notice cannot substitute for one of the listed events. The protection is not permanent, because it ends once one of those events occurs.FINRA Rule 12204(a), (d)

A customer buys an annuity in June 2020 and files a FINRA arbitration claim in July 2026 alleging the sale was unsuitable. What is the status of the claim under the Code's time limit?

• a.Ineligible, because six years have elapsed since the event; dismissal does not by itself keep her out of court✓
• b.Eligible, because the six-year limit applies only to claims against associated persons, not members
• c.Ineligible, and a dismissal on that ground also bars the customer from filing the claim in court
• d.Eligible, because the six years run from when the customer discovered the problem with the product

Rule 12206(a) makes a claim ineligible once six years have elapsed from the occurrence or event giving rise to it, and the panel resolves eligibility questions. June 2020 to July 2026 is more than six years. The period runs from the event, not from discovery, and it applies to claims against members as well. Rule 12206(b) says a dismissal under the rule does not prohibit a party from pursuing the claim in court.FINRA Rule 12206(a)

In a customer arbitration, a respondent firm ignores two panel orders to produce documents, even after a warning and a monetary sanction. What is the strongest step the panel may take under the Code?

• a.Suspend the firm's FINRA membership until the documents have been produced to the panel
• b.Bar the firm's associated persons from the industry until the firm complies with the orders
• c.Dismiss the firm's defense, or the whole arbitration, with prejudice for material and intentional noncompliance✓
• d.Assess a fine payable to FINRA, since sanctions in arbitration go to the forum rather than to a party

Rule 12212(c) lets the panel dismiss a claim, defense or arbitration with prejudice as a sanction for material and intentional failure to comply with an order when prior warnings or sanctions have proven ineffective. Panels sanction parties inside the case: monetary penalties are payable to one or more parties, not to FINRA. Suspending membership or barring persons are disciplinary sanctions under Rule 8310, and the panel's role there is limited to a disciplinary referral at the end of the case.FINRA Rule 12212(a), (c)

A customer lived in Ohio when the events behind her claim occurred and has since moved to Arizona. Which hearing location will the Director generally select for her arbitration?

• a.The hearing location closest to her residence on the date the claim is filed
• b.FINRA's New York location, which hears all customer cases involving more than one state
• c.The FINRA hearing location closest to where she lived when the events occurred✓
• d.The hearing location closest to the respondent firm's principal office

Rule 12213(a)(1) directs the Director generally to select the hearing location closest to the customer's residence at the time of the events giving rise to the dispute. The firm's office and the customer's later address do not drive the choice, and the Code has no single national location for multistate disputes. Before arbitrator lists are sent, the parties may agree in writing to a different location.FINRA Rule 12213(a)(1)

A customer's claim is for $80,000, exclusive of interest and expenses. How many arbitrators decide the claim under the Code?

• a.Three, because every claim above $50,000 must be heard by a full panel
• b.Three, unless all of the parties agree in writing to one
• c.One arbitrator, unless the parties agree in writing to three✓
• d.One, and the parties have no option to agree on a different number

Rule 12401(b) provides that a claim of more than $50,000 but not more than $100,000 is heard by one arbitrator unless the parties agree in writing to three. The three-arbitrator default belongs to claims above $100,000, unspecified claims and non-monetary claims, which can go to one arbitrator only by written agreement. The $50,000 mark is the simplified-procedure ceiling, not the point at which a full panel is mandatory.FINRA Rule 12401(b)

A customer files a $40,000 claim against a member and does not ask for a hearing. How is the claim decided?

• a.By one arbitrator after a hearing, since every customer arbitration includes at least one session
• b.By a three-arbitrator panel after an initial prehearing conference and a hearing on the merits
• c.By a single arbitrator on the written pleadings and other materials, with no hearing held✓
• d.By a FINRA staff attorney, who issues a binding award without appointing an arbitrator

Rule 12800 applies simplified arbitration to claims of $50,000 or less, exclusive of interest and expenses. Unless the customer requests a hearing, one arbitrator decides on the pleadings and other submitted materials, and no prehearing conference is held. Panels of three apply to larger claims. Hearings are not mandatory in simplified cases, and awards are made by arbitrators, not staff.FINRA Rule 12800(a), (c)

A member receives a monetary arbitration award it believes is wrong. Which statement about the member's position under the Code is accurate?

• a.The award is final and not subject to appeal, and it must be paid within 30 days of receipt unless a motion to vacate is filed in court✓
• b.The member may appeal to a FINRA review panel within 30 days, and payment is postponed until that appeal is decided
• c.The member may ask the original panel to reconsider within 30 days, and payment is postponed while the request is pending
• d.The award is final, but the member may hold payment for 90 days while it decides whether to move to vacate

Rule 12904(b) makes awards final and not subject to review or appeal unless applicable law directs otherwise, and paragraph (j) requires payment within 30 days of receipt unless a motion to vacate has been filed with a court of competent jurisdiction. The Code has no internal appeal or reconsideration step that suspends payment, and it does not give a 90-day grace period. An unpaid award also begins to bear interest when it is not paid within 30 days.FINRA Rule 12904(b), (j)

A small broker-dealer buys bonds from a member firm and files a claim under the Customer Code alleging the sales were unsuitable. Why is the claim not covered by the Customer Code?

• a.Claims about bond purchases are arbitrated only under the rules of the MSRB
• b.Only natural persons can be customers, so no entity may use the Customer Code
• c.The Code defines a customer so that it does not include a broker or dealer✓
• d.The claimant held only an omnibus account, and customer status requires an individual account

Rule 12100(k) states that a customer does not include a broker or dealer, so a dispute between broker-dealers is handled under the Industry Code instead. Entities such as corporations and trusts can be customers, so the claim does not fail because the claimant is not a natural person. The MSRB does not run an arbitration forum that displaces FINRA's for bond purchases, and the Code does not turn on account type.FINRA Rule 12100(k)

A member's office of supervisory jurisdiction closes a written customer complaint file in October 2026. For how long must the complaint records be preserved under Rule 4513?

• a.At least four years, in a separate file kept at each OSJ✓
• b.At least six years, the Rule 17a-4(c) period for account records
• c.At least three years, the Rule 17a-4(b) period for order memoranda
• d.At least two years from the date the complaint is resolved

Rule 4513 requires customer complaint records to be preserved for at least four years. Three years is the retention period Rule 17a-4(b) sets for order memoranda, and six years is the period that applies to account records, so each belongs to a different record. There is no five-year complaint period.FINRA Rule 4513

On Wednesday, September 2, 2026, a member learns that one of its registered representatives has pleaded guilty to a felony. By what date must the member report the event to FINRA under Rule 4530(a)?

• a.Thursday, September 17, 2026, which is 15 calendar days after the member learned of it
• b.Monday, October 12, 2026, which is the first quarter-end reporting date for the event
• c.Wednesday, December 2, 2026, which is 90 calendar days after the member learned of it
• d.Friday, October 2, 2026, which is 30 calendar days after the member learned of it✓

Rule 4530(a) requires a member to report promptly, and in any event not later than 30 calendar days, after it knows or should have known of the event, and a guilty plea to a felony is a listed event. Thirty days from September 2 is October 2. The 15th-of-the-month date belongs to quarterly complaint statistics, not event reports, and no quarter-end date applies to this report. Ninety days is longer than the rule allows.FINRA Rule 4530(a)(1)(E)

A customer writes that a representative forged her signature on a withdrawal request. The firm is still investigating, no loss has been quantified, and nothing has been filed on the representative's Form U4. Must the firm report the complaint to FINRA under Rule 4530?

• a.No, because complaints are reported only in the quarterly statistical summary under Rule 4530(d)
• b.No, a report is due only after the investigation substantiates the forgery allegation
• c.Yes, but only if the alleged loss exceeds $15,000, the threshold for reportable civil claims
• d.Yes, within 30 calendar days after it knew or should have known of the complaint, whatever the amount involved✓

Rule 4530(a)(1)(B) makes a written customer complaint alleging theft, misappropriation or forgery reportable within 30 calendar days after the member knows or should have known of it. The allegation alone triggers the duty, with no dollar threshold and no wait for the firm's findings. Quarterly statistics under paragraph (d) are an additional report and do not replace this one. The $15,000 figure applies only to civil litigation or arbitration disposed of by judgment, award or settlement.FINRA Rule 4530(a)(1)(B)

A member receives a written customer complaint on Wednesday, August 12, 2026. By what date must the member include it in its quarterly statistical and summary complaint report to FINRA?

• a.Tuesday, September 15, 2026, the 15th day of the month after the month in which it was received
• b.Monday, November 16, 2026, the 15th day of the second month after quarter-end
• c.Friday, September 11, 2026, which is 30 calendar days after the complaint was received by the firm
• d.Thursday, October 15, 2026, the 15th day after the quarter in which it was received✓

Rule 4530(d) requires statistical and summary complaint information by the 15th day of the month following the calendar quarter in which the complaints are received. August falls in the quarter ending September 30, so the report is due October 15. The 30-day period applies to event reports under paragraph (a), the monthly measure does not exist in the rule, and the report is not due a second month after quarter-end.FINRA Rule 4530(d)

When FINRA suspends the registration of an associated person under Rule 8310, for what period may the suspension be imposed?

• a.Only an indefinite period that ends when the person passes a new qualification examination
• b.A definite period, or a period contingent on the performance of a particular act✓
• c.Only a period that the member firm sets, subject to FINRA's later approval of the term
• d.Only a definite period, which may not exceed one year without review by the SEC

Rule 8310(a)(3) allows FINRA to suspend a membership or registration for a definite period or for a period contingent on the performance of a particular act. The rule sets no one-year cap or SEC review step, and it does not limit suspensions to those that end on an examination. FINRA imposes the sanction itself after the Rule 9000 Series process; the member firm does not set its term.FINRA Rule 8310(a)(3)

On Monday, October 5, 2026, a registered representative learns of facts that require an amendment to her Form U4, none involving a statutory disqualification. By what date must the amendment be filed?

• a.Friday, December 4, 2026, which is 60 days after learning the facts
• b.Tuesday, October 6, 2026, which is the next business day after she found out
• c.Wednesday, November 4, 2026, which is 30 days after learning the facts✓
• d.Thursday, October 15, 2026, which is 10 days after learning the facts

Article V, Section 2(c) of the FINRA By-Laws requires an application for registration to be kept current by amendments filed not later than 30 days after learning of the facts or circumstances giving rise to the amendment. Thirty days from October 5 is November 4. The 10-day period is reserved for amendments involving a statutory disqualification, and the rule has neither a next-day nor a 60-day standard.FINRA By-Laws, Article V, Section 2(c)

On Monday, October 5, 2026, a representative's circumstances change so that he becomes subject to a statutory disqualification. By what date must his Form U4 be amended?

• a.Wednesday, November 4, 2026, which is 30 days after it occurs
• b.Monday, October 12, 2026, which is one week after the event
• c.Friday, December 4, 2026, which is 60 days after it occurs
• d.Thursday, October 15, 2026, which is 10 days after it occurs✓

Article V, Section 2(c) sets 30 days for ordinary Form U4 amendments but says an amendment involving a statutory disqualification must be filed not later than ten days after the disqualification occurs. Ten days from October 5 is October 15. Thirty days is the general period, and neither the 7-day nor the 60-day figure appears in the rule.FINRA By-Laws, Article V, Section 2(c)

A person passes the SIE, and a member that hired her wants her to begin recommending mutual funds right away. She has not taken the Series 6. May the member register her as an Investment Company and Variable Contracts Products Representative?

• a.No, because she must first complete a year of supervised work at the member
• b.No, because the SIE alone does not qualify her; she must also pass the Series 6✓
• c.Yes, because the SIE is the only examination required to register as a representative
• d.Yes, for 120 calendar days while she prepares for the Series 6 as a temporary registrant

Supplementary Material .03 to Rule 1210 requires a person to pass the SIE and an appropriate representative qualification examination before registration as a representative can become effective, and it states that passing the SIE alone does not qualify an individual for registration. The SIE is therefore not the only examination needed. The 120-day allowance in Supplementary Material .04 lets an experienced registered representative function as a principal; it is not a temporary registration for someone who has not passed the representative exam. The rule sets no year of supervised work before registration.FINRA Rule 1210, Supplementary Material .03

A member wants a representative with 14 months of experience as a registered representative in the past five years to act as a principal for 120 calendar days before he passes the principal exam. May it do so?

• a.Yes, because 12 months of experience in the past five years is all the rule requires
• b.No, because the representative needs at least 18 months of such experience in the five-year period✓
• c.No, because a representative may not act as a principal at all until the principal exam is passed
• d.Yes, because any registered representative may act as a principal for 120 days before passing the exam

Supplementary Material .04 to Rule 1210 permits a member to designate a registered representative to function as a principal for 120 calendar days before passing the principal exam, but only if the person has at least 18 months of experience as a registered representative within the five-year period before the designation and has met the prerequisite registration, fee and examination requirements. Fourteen months falls short. The 12-month figure does not appear in the rule, and the 120-day allowance does exist.FINRA Rule 1210, Supplementary Material .04