General Securities Sales Supervisor (Series10) Practice Exam

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Study for the General Securities Sales Supervisor (Series 10) Exam. Engage with flashcards and multiple choice questions, each with hints and explanations. Prepare confidently for your exam day!

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Which regulatory body oversees the enforcement of the soft dollar rule?

FINRA
SEC
MSRB
CFTC

The correct answer is: FINRA

The correct answer is that the Financial Industry Regulatory Authority (FINRA) oversees the enforcement of the soft dollar rule. This rule allows investment firms to use client commissions to pay for research and analysis services provided by third parties, as long as the benefits received are appropriate to the services rendered. FINRA’s role is essential as it sets rules and regulations for brokerage firms and exchange markets, ensuring compliance with the soft dollar arrangements. FINRA has the authority to enforce these rules and can conduct examinations and investigations to ensure that firms adhere to ethical practices when utilizing soft dollars. The Securities and Exchange Commission (SEC) also plays a role in overseeing securities regulations, including some aspects of soft dollar arrangements, but the direct enforcement of the soft dollar rule primarily falls under FINRA. The Municipal Securities Rulemaking Board (MSRB) focuses on municipal securities regulations, while the Commodity Futures Trading Commission (CFTC) oversees derivatives and commodities markets, neither of which are directly related to the soft dollar arrangements relevant to equity and debt market transactions.