General Securities Sales Supervisor Exam (Series 9/10) Flashcards
Browse all 13 cards
What supervisory review is required for discretionary accounts?
Each discretionary order must be identified as discretionary, and a principal must review discretionary accounts frequently to detect excessive trading (churning).
How many questions are on the Series 9/10 exam, and what is the passing score?
The Series 9/10 has 200 multiple-choice questions total, and the passing score is 70 percent for each part.
What is the difference between the Series 9 and Series 10 parts?
The Series 9 covers options supervision, and the Series 10 covers general supervision of a branch office (sales, hiring, customer accounts, trading, and compliance).
Who must approve the opening of a new customer account at a branch?
A registered principal (the supervisor) must approve each new account, typically documented by signature on the new account form.
What must a supervisor review before options trading begins for a customer?
The supervisor confirms an Options Disclosure Document (ODD) was delivered at or before account approval and that a Registered Options Principal (ROP) approved the account based on suitability.
How must customer complaints be handled by a supervisor?
Written complaints must be recorded, reviewed, retained, and reported to FINRA; supervisors keep a complaint file at each branch.
What is the supervisor's role in reviewing correspondence and communications?
A principal must supervise the firm's communications with the public — retail communications generally need principal approval before use, and correspondence is subject to review under written procedures.
What triggers heightened supervision of a registered representative?
Disciplinary history, customer complaints, or a statutory disqualification can require a special written supervisory plan and closer monitoring of the rep's activity.
What is the covered call vs. protective put strategy from a supervisory suitability view?
A covered call (long stock + short call) generates income with limited upside; a protective put (long stock + long put) hedges downside like insurance — supervisors confirm the strategy matches the customer's objective.
What margin supervision applies to option positions?
Long options are paid in full (no margin), while uncovered (naked) short options require margin; supervisors ensure adequate margin and monitor uncovered writing due to unlimited risk.
What recordkeeping is a branch supervisor responsible for?
The supervisor ensures order tickets, account records, complaint files, and communications are accurately created and retained per the firm's written supervisory procedures.
What does the Series 9/10 qualification authorize a person to do?
It qualifies a General Securities Sales Supervisor to supervise sales activities in corporate, municipal, and options securities, plus REITs, direct participation programs, and investment company products.
What is the purpose of Written Supervisory Procedures (WSPs)?
WSPs document how a firm supervises each area of its business, assign responsibility to named principals, and are the framework a Sales Supervisor uses to detect and prevent violations.