General Securities Sales Supervisor (Series10) Practice Exam

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When is an "Investor Brochure" required to be provided to municipal security customers?

A Prior to trading of any municipal securities
B After a transaction is completed
C When a customer requests it
D When there is a formal complaint

The correct answer is: D When there is a formal complaint

The requirement to provide an "Investor Brochure" to municipal security customers arises under specific regulatory guidelines, which emphasize transparency and education for investors. The most accurate context for the distribution of the brochure is when there are formal complaints filed against a broker-dealer. This ensures that investors are informed and have access to crucial information that may assist them in understanding their rights and the nature of their investment, especially in situations that involve dissatisfaction or disputes. Providing the brochure at this juncture helps reinforce the broker-dealer's commitment to transparency and responsible practices. It empowers the investor with knowledge that can guide them through potential issues they might face in their investment journey. In contrast, the other options suggest earlier or different scenarios for providing this information that do not align with the regulatory requirements, particularly regarding investor protections and formal procedures.