General Securities Sales Supervisor (Series10) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Study for the General Securities Sales Supervisor (Series 10) Exam. Enhance your skills with multiple choice questions and explanations. Master your exam with detailed insights and tips!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What must a manager obtain to conduct a sales campaign recommending low-priced stocks?

This is a valid action without any prerequisites
The manager must get the prior written approval of the general principal
This action is completely valid under FINRA rules
This action is a violation of the FINRA Conduct Rules

The correct answer is: This action is completely valid under FINRA rules

The correct answer involves understanding the regulatory framework surrounding the recommendation of low-priced stocks. Under FINRA rules, a sales campaign that recommends low-priced stocks is subject to certain conditions, including ensuring that the recommendations are suitable for the clients and comply with all applicable disclosure requirements. In particular, while no specific prior written approval from a general principal is mandated for such campaigns, it is essential that the manager conducts thorough due diligence and ensures that the campaign aligns with the firm's supervisory policies. Therefore, while this type of recommendation does not outright violate FINRA conduct rules, it requires careful consideration of the suitability and proper disclosures to clients, promoting ethical sales practices. This means that while option C is technically valid in affirming the permissibility of conducting such a campaign under FINRA rules, it does not excuse the need for adherence to other principles such as suitability and transparency in recommendations.