Series 51: New Suitability Standard

Taken from our Series 51 Online Guide

New Suitability Standard

MSRB recently revised its suitability rule to conform to FINRA’s recent changes to its own suitability rule. Specifically, the amended rule recognizes three components with regard to a broker-dealer’s suitability obligations.

• Reasonable-basis obligation. A dealer must understand the complexity and risks of a security or investment strategy and consciously determine whether it is suitable for at least some investors. If a dealer does not understand the risks and mechanics of mortgage-backed securities, for example, it is a suitability violation to recommend them to investors. In addition, if a dealer’s due diligence finds that the risks of a particular security are so great that even an aggressive investor would not be interested, it would be a suitabili

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Using Solomon was very helpful. The exam simulator tests were great, but I should have spent a little more time re-reading the chapters. Passed (Series 51) on my first try.

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