Investment Company and. Variable Contracts Products Principals (Series 26) Practice Exam

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What is the filing requirement with FINRA for first year firms for communications with the public?

10 business days prior to use
5 business days prior to use
15 business days prior to use
Immediate filing

The correct answer is: 10 business days prior to use

The filing requirement of 10 business days prior to use for communications with the public is established to ensure that new firms have ample time to seek approval from FINRA before disseminating their materials. This provision is particularly relevant for first-year firms, which may need additional oversight as they establish their compliance practices and communications strategies. The 10-day timeframe provides FINRA with enough opportunity to review the materials for compliance with regulatory standards, helping to protect investors and maintain market integrity. This requirement emphasizes the importance of oversight in the early stages of a firm's operations, as they may not yet have fully developed their compliance processes. By allowing a two-week lead time, FINRA aims to mitigate the risks associated with misunderstandings or misrepresentations in marketing and communication efforts that could arise from inexperience. This duration is longer than typical requirements for established firms, underlining the recognition that new firms may require more scrutiny to ensure they are meeting all regulatory obligations from the outset.