Chapter 9 Practice Question Answers
1. Answer: B. Each dealer is required to establish written procedures for the supervision and review of any incoming or outgoing correspondence between its Municipal Securities Representatives and the public pertaining to municipal securities activities. Dealers must maintain records indicating that the required supervision and review procedures have been met. In order to comply, the records must identify the persons who prepared the correspondence and the persons who reviewed the correspondence. The records must be preserved for no less than three years for bank dealers, including those municipal securities dealers that are a subsidiary or division of a bank. Other brokers, dealers, and municipal securities dealers must retain the records for at least four years. These records must be made available to regulatory agencies when requested.
2. Answer: B. If a party cannot confirm a trade based on the trade confirmation, it must immediately notify the confirming party. If the discrepancy cannot be resolved, within one business day the party claiming the discrepancy should send the other party a written notice of non-recognition (also called a “don’t know” or DK notice) indicating its non-recognition of the trade. If the discrepancy cannot be resolved by close of business on the day following receipt of the DK notice, the party that sent the notice of non-recognition may promptly send the other party a written cancellation notice, terminating the trade.
3. Answer: A. A complaint is defined as any written statement alleging a grievance about the behavior of the dealer or associated person regarding any matter involving a customer’s account. The record of the complaint must also include any actions taken by the dealer in response to the complaint. Dealers are required to maintain records of customer complaints for at least six years.
4. Answer: C. Prior to an interest payme