General Securities Sales Supervisor (Series10) Practice Exam

How often must customer account records be inspected by the Office of Supervisory Jurisdiction?

1. At least annually

2. At least quarterly

3. Periodically

4. No inspection required

The correct answer is: Periodically

Customer account records must be inspected periodically by the Office of Supervisory Jurisdiction (OSJ) to ensure compliance with regulations and to monitor for any potential issues. The periodic inspections serve as a way to review the activity within customer accounts, verify adherence to policies and procedures, and ensure that the firm's practices align with regulatory standards. This approach allows for flexibility in determining the frequency and depth of inspections based on the specific needs of the firm, volume of transactions, and previous findings. While annual and quarterly inspections may be beneficial and sometimes required for certain aspects, the term "periodically" encompasses a broader range of timing that can adapt to the firm's operational circumstances and compliance mandates. In contrast, other options imply a fixed schedule, which may not be practical for every firm or every situation. Thus, "periodically" offers the necessary latitude for compliance oversight while maintaining effective management of customer account records.