Question of the Week

When a broker-dealer has decided to provide its registered representatives with reprints from a magazine article, which gives a highly-favorable rating to a mutual fund and these are to be used along with a prospectus in sales presentations, these materials:
   
A) Must be approved by a principal of the firm prior to use.
B) Require no approval because they are from an outside, authoritative publication.
C) Must be filed with the NASD and approved 5 days before first use.
D) Must be approved by the SEC prior to first use.

Answer:

The correct answer is A)

All sales literature, specifically including reprints, must be approved by a principal of the firm prior to use. The SEC does not approve or disapprove. The choice stating that these materials "must be filed with the NASD and approved 5 days before first use", is incorrect as to the approval and the number of days.

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