Free Series 9/10 Exam Flashcards

A supervisory position required to approve options accounts, review options correspondence, and supervise options trading activities. Must pass Series 4 exam and be designated by the firm to perform these functions.

The process by which a ROP must review and approve customer accounts for options trading. Requires assessment of customer's financial situation, investment experience, investment objectives, and understanding of options risks.

A standardized document that must be provided to customers at or before the time an options account is approved. Describes the characteristics and risks of standardized options. Created by OCC.

A document that must be signed by the customer within 15 days of account approval. Outlines the terms and conditions for options trading, including margin requirements and exercise procedures.

Maximum number of option contracts on the same side of the market (bullish or bearish) that any person can hold. Limits vary based on underlying security's trading volume and float. Violations require supervisor attention.

Documented policies and procedures required by FINRA Rule 3110 that detail how a firm supervises its business activities. Must be tailored to the firm's specific business and reviewed annually.

A mandatory yearly meeting where registered representatives receive compliance training on regulatory changes, firm policies, and ethical standards. Attendance must be documented and reported.

A supervisory tool tracking key regulatory deadlines including annual audits, branch inspections, Form U4/U5 updates, and continuing education requirements. Essential for maintaining firm compliance.

Mandatory continuing education program administered by FINRA. Required within 120 days of the second registration anniversary and every three years thereafter. Failure to complete results in inactive status.

The broker-dealer's annual training program based on its business activities and regulatory developments. Supervisors must ensure all covered persons complete required training and maintain documentation.

FINRA Rule 5310 requiring firms to use reasonable diligence to obtain the most favorable terms for customer orders. Supervisors must establish policies to regularly review execution quality and routing practices.

An integrated audit trail of order, quote, and trade information for all NMS stocks and OTC equity securities. Supervisors must ensure accurate and timely reporting of all required data elements.

SEC rule governing short sales, including locate requirements and close-out obligations. Supervisors must ensure the firm has procedures to mark orders correctly and comply with threshold security requirements.

A prohibited practice where a firm trades for its own account before executing a customer order in the same security. Supervisors must monitor proprietary trading to prevent this violation.

The prohibited practice of inserting a third party between a customer and the best available market, resulting in higher costs to the customer. Supervisors must ensure orders are executed directly when possible.

An individual assigned responsibility for supervising specific business lines, branch offices, or registered representatives. Must be registered as a principal and have adequate authority to perform supervisory functions.

Required periodic examination of branch locations to verify compliance with firm procedures and regulations. Non-OSJ branches require inspection at least every three years; OSJs require annual inspection.

A location designated for supervisory purposes where order execution, structuring of public offerings, or final approval of retail communications occurs. Requires annual inspection and on-site supervision.

Automated alerts that flag potentially problematic trading activity such as excessive trading, concentrated positions, or suitability concerns. Supervisors must review, investigate, and document responses.

Required oversight of written and electronic communications with customers. Must be conducted by a qualified supervisor, documented, and include review of incoming and outgoing correspondence.

Documentation of a customer's age, financial situation, tax status, investment objectives, risk tolerance, time horizon, liquidity needs, and other relevant information used to determine suitability.

The requirement that a series of recommended transactions, even if suitable individually, are not excessive in light of the customer's profile. Supervisors must monitor for potential churning.

The requirement that a representative have a reasonable basis to believe a recommendation is suitable for at least some investors. Requires understanding the product and its risks before recommending it.

The requirement that a recommendation be suitable for a particular customer based on their investment profile. The recommendation must align with the customer's stated objectives and risk tolerance.

Enhanced oversight applied to representatives with compliance issues, customer complaints, or regulatory actions in their history. May include pre-approval of trades and frequent review of activity.

The Uniform Application for Securities Industry Registration used to register individuals with SROs and jurisdictions. Must be updated within 30 days for most changes; within 10 days for disciplinary events.

The Uniform Termination Notice filed when a registered person leaves a firm. Must be filed within 30 days of termination and include the reason for termination and any customer complaints.

A condition that bars a person from associating with a FINRA member firm. Caused by felony convictions, certain misdemeanors, SEC/SRO disciplinary actions, or false statements on registration applications.

FINRA registration types including Representative (sales functions) and Principal (supervisory functions). Series 9/10 qualifies individuals as General Securities Sales Supervisors.

Employment or compensation from any entity outside the member firm. Must be reported to the firm and may require written approval. Supervisors must review and document all OBA disclosures.

Written or electronic communication distributed to more than 25 retail investors within 30 days. Requires principal pre-approval before first use and filing with FINRA if required by the rules.

Communication distributed only to institutional investors (banks, insurance companies, registered investment companies). Does not require pre-approval but must be supervised and filed if requested.

Written or electronic communication to 25 or fewer retail investors within 30 days. Subject to supervision and review but typically does not require pre-approval unless firm policy dictates otherwise.

Policies and procedures for monitoring representatives' use of social media for business purposes. Must distinguish between static content (pre-approval required) and interactive content (post-review).

Customer endorsements that may be used in retail communications under SEC Rule 206(4)-1. Must include required disclosures about compensation and the testimonial provider's relationship with the firm.

A written program required by the Bank Secrecy Act including policies, procedures, internal controls, a designated AML compliance officer, independent testing, and ongoing employee training.

The process of verifying customer identity and understanding the nature of their account activity to assess risk. Enhanced due diligence required for higher-risk customers such as foreign nationals or PEPs.

An individual in a prominent public position or their close associates. Requires enhanced due diligence due to higher corruption and money laundering risk. Includes foreign officials and their families.

Indicators of potential money laundering including unusual cash transactions, reluctance to provide identification, rapid movement of funds, and transactions inconsistent with stated business purpose.

Requirement to comply with Office of Foreign Assets Control sanctions. Firms must screen customers against OFAC lists and cannot conduct business with sanctioned individuals, entities, or countries.

Any location where one or more associated persons regularly conducts securities business must be registered as a branch office. Requires Form BR filing with FINRA within 30 days of opening.

SEC Rules 17a-3 and 17a-4 requiring firms to create and maintain specific records including customer account information, order tickets, trade confirmations, and correspondence for required retention periods.

A written plan required by FINRA Rule 4370 addressing how the firm will continue operations during significant business disruption. Must be reviewed annually and made available to customers upon request.

Supervisory procedures for monitoring representatives working from non-branch locations. Requires enhanced oversight of communications, trading activity, and periodic physical inspections.

Written procedures for receiving, documenting, and responding to customer complaints. Complaints must be investigated promptly, and supervisors must maintain a complaint log for regulatory review.

Selling away: participating in securities transactions outside the regular course of employment. Requires prior written notice to employer and may require approval. Violation can result in termination.

Effective March 30, 2026, FINRA Rule 3220 limits business-related gifts to $300 per recipient per year. Gifts must be aggregated and recorded. The amended rule separately addresses qualifying business entertainment and other exceptions.

The improper practice of selling mutual fund shares just below a breakpoint level to earn higher commissions. Supervisors must monitor for breakpoint violations and ensure customers receive applicable discounts.

Moving customer assets between mutual funds without a reasonable basis. May indicate churning if done excessively. Supervisors must review switches to ensure suitability and document the rationale.

FINRA Rule 2330 requires principal review of variable annuity transactions within 7 business days. Supervisors must verify suitability, evaluate surrender charges, and ensure customers understand the product features.