A registered representative has discovered an article in a major news magazine that makes statements ...

By Investopedia Staff AAA
Q:
A registered representative has discovered an article in a major news magazine that makes statements that are highly favorable about a mutual fund that his company offers. If he wants to use the article in making presentations to prospects, what are the implications?
A) He may only use the information if it has been approved by a principal of his firm.
B) There are no restrictions to using material which is in the public domain.
C) The use of such material with public customers is only permitted if approved by the SEC prior to use.
D) The information in the magazine article would have to be filed with the NASD within 30 days of first use.
A:
The correct answer is c.
The use of magazines, as well as reprints, falls under the NASD rules regarding communications with the public, and as such, are considered to be sales literature. Such material must be approved by a principal prior to use with public customers.

RELATED FAQS

  1. The popular trading system "Instinet" is situated in which of the following markets ...

    Free info on financial certification exams including study guides, exam questions, and much more!
  2. When a floor broker asks a specialist, “How’s PDQ?” ...

    The correct answer is d) When the specialist gave the floor broker the quote of “59.20 to 35; 6 by 11,”  the quote meant ...
  3. A person purchases stock XYZ (an Over The Counter stock) from a company who is also ...

    The correct answer is c When the firm is a market maker in the stock then it must act as a principle. Principal is the main ...
  4. An individual made a lump-sum deposit into a variable annuity of $25,000 ...

    The correct answer is c). Early withdrawal from a non-qualified annuity--prior to age 59½, except for death or disability, ...
RELATED TERMS
  1. Series 79

    A examination to ensure a candidate is qualified to become a ...
  2. Research Analyst

    A person who prepares investigative reports on equity securities. ...
  3. Series 34

    An exam required for individuals seeking to engage in off-exchange ...
  4. Financial Advisor

    One who provides financial advice or guidance to customers for ...
  5. Series 23

    An exam offered by the Financial Industry Regulatory Authority ...
  6. Series 28

    An exam given by the Financial Industry Regulatory Authority ...

You May Also Like

Related Articles
  1. Professionals

    Should You Add A Securities License ...

Trading Center