SERIES 6 EXAM ASKS QUESTIONS ABOUT SEC RULE BEST INTEREST

SEC Regulation Best Interest 

The SEC has adopted Regulation Best Interest, or Regulation BI. This regulation requires a brokerage firm, advisory firm, or representative, to consider a retail customer's best interests when making a recommendation to that customer. The broker may not factor in his or her interests when telling a retail customer to buy this or that stock, mutual fund, or any other security. Paramount is that a recommendation be in the customer's best interest. Thus, Regulation BI seeks to eliminate conflicts of interest, such as allowing a representative to recommend shares of a particular mutual fund that carry a sales charge higher than another fund, when apart from sales charge, both funds are equally suitable.


FINRA's Study Outline for the Series 6 includes material about Regulation Best Interest. See 2.1, 2.2, 2.3 in the Content Outline.


Here is the link to our book, Study for the Series 6 Exam, on Amazon.

Here is the link to FINRA's Content Outline. 

Bob Eder received his Juris Doctor (J.D.) degree from the University of Utah, Quinney College of Law, in 2001. He is a member of the Utah State Bar. He no longer practices law.




Comments

Post a Comment

Popular posts from this blog

SERIES 6 CANDIDATES! KNOW THE REQUIREMENTS WHEN OPENING ACCOUNTS FOR CUSTOMERS!

Planning to sit for the Series 6 Exam? Then be prepared for questions on Opening Customer Accounts, including the necessary items required for accepting a new customer. FINRA publishes a Content Outline for the Series 6 Exam, and Section 2.1 specifically talks about the requirements for opening customer accounts. Therefore FINRA is telling us that the Series 6 Exam will include questions on opening such accounts. Bob Eder in his Study for the Series 6 Exam discusses the customer account  requirements in Chapter Four. The SEC also publishes a list of these requirements. Here is what the SEC says at  (https://www.sec.gov/oiea/investor-alerts-bulletins/investoralertsib_openbrokerageaccount): "Information You Will Need to Provide "Brokers generally request personal information from their customers, including financial and tax identification information. Brokers need this information to comply with laws and other regulations. Some of the information a broker will likely ask you t...
Read more

SERIES 6 EXAM ASKS QUESTIONS ABOUT LIVING TRUSTS

One of the common misunderstandings of "living trusts" is that a person who sets up the trust, i.e., the "grantor," obtains sizeable and valuable tax benefits. This is not correct. The purpose of setting up a living or "revocable trust is to provide an easier way to transfer assets to beneficiaries upon the death of the grantor, not to obtain tax benefits either for the grantor or for the beneficiaries. The subject of living trusts is contained in the Series 6 Content Outline published by FINRA, indicating that questions on living trusts are contained in the Series 6 exam. Here is the link to FINRA's Content Outline for the Series 6 . For more discussion of living trusts,   see Study for the Series 6 Exam. Bob Eder's book is available from Amazon in both paperback and Kindle e-book versions.  Here is the link to Bob Eder's book on Amazon . Bob Eder received his Juris Doctor (J.D.) degree from the University of Utah, Quinney College of Law in 2001.
Read more

SERIES 6 EXAM CONTAINS 55 QUESTIONS, BUT ONLY 50 ARE SCORED

Thinking of taking the Series 6 exam because you wish to become registered to sell investment companies, mutual funds, and variable products? Then you should know that the Series 6 exam, administered by FINRA, contains a total of 55 questions, of which five are "experimental" and thus do not count towards your score. You have 90 minutes to complete the Series 6. Passing score is 70 percent, or 35 questions answered correctly. Bob Eder's study text,  Study for the Series 6 Exam , explains the items covered on the Series 6 exam, such as Regulation D and private placements, including practice questions.  For your assistance, Bob Eder's book places the numbered sections of  FINRA's  Content Outline next to major paragraphs. This allows the student to be confident that the material in Study for the Series 6 Exam corresponds with FINRA's Study Outline. Bob Eder's book,  Study for the Series 6 Exam , is available from Amazon in either paperback or...
Read more