General Securities Sales Supervisor (Series10) Practice Exam

When must a municipal dealer provide a customer with a copy of the Investor Brochure?

1. A At or prior to the opening of the account

2. B Upon receipt of a written complaint

3. C Upon purchase of a new municipal issue

4. D Prior to the completion of the first transaction in the account

The correct answer is: B Upon receipt of a written complaint

The correct timing for a municipal dealer to provide a customer with a copy of the Investor Brochure is prior to the completion of the first transaction in the account. This requirement ensures that customers are fully informed about the risks and characteristics of the municipal securities being traded before they engage in any transactions. The Investor Brochure typically includes important information regarding the responsibilities, potential risks, and market conditions related to municipal securities, allowing investors to make more informed decisions. The other options, while relevant in different contexts, do not align with the specific regulatory requirement regarding the Investor Brochure. While providing the brochure at or before account opening may seem beneficial, it's not the mandated timing. Similarly, the act of waiting until a written complaint is received or until the purchase of a new municipal issue does not fulfill the requirement to disclose this information proactively before any transaction occurs. Thus, providing it prior to the completion of any transaction is crucial for investor protection and compliance with regulatory standards.