Chapter 3 Practice Questions
1. All of the following activities must take place at an Office of Supervisory Jurisdiction except:
A. Accepting new customer accounts
B. Taking customer orders
C. Maintaining custody of customer securities
D. Executing customer orders
2. A registered principal is conducting his firm’s annual internal inspection at its OSJs. Which of the following is not a specific responsibility with respect to this written report?
A. To review customer account records for irregularities and abuses
B. To test policies and procedures for safeguarding funds and securities
C. To evaluate supervision of customer accounts serviced by branch office managers
D. To ensure compliance with the telemarketing policy
3. Which of the following duties can be carried out by a principal who is not located at an OSJ?
A. Giving a written approval for an institutional order
B. Giving final approval of new accounts
C. Supervising persons at a branch office
D. Giving written approval for a representative’s correspondence that includes a solicitation to buy securities
4. An OSJ must be inspected at least once every _____, while a branch office that doesn’t supervise any non-branch offices must be inspected at least once every _____.
A. Year; three years
B. Three years; year
C. Year; two years
D. Calendar quarter; year
5. For a firm with more than 20 reps, what is the threshold at which the firm will be subject to the taping rule?
A. 10% of the reps are disciplined reps
B. 20% of the reps are disciplined reps
C. 30% of the reps are disciplined reps
D. 40% of the reps are disciplined reps
6. If a firm is subject to the taping rule, which of the following is not true?
A. The firm is given a chance to “opt-out” by hiring more reps that have not been disciplined.
B. If the firm chooses to “opt out,” it must do so within 30 days.
C. The special supervisory procedures typically requi