FINRA Series 7Processes and Confirms TransactionsMedium
A customer's margin account holds open securities positions but has had no trading activity for the past six months. How frequently is the firm required to send account statements to this customer?
- ASemi-annually
- BQuarterly
- CAnnually
- DMonthly
Show answer & explanationAnswer & explanation
Correct answer: B. Quarterly
FINRA rules require account statements to be sent at least quarterly for accounts that carry securities positions, even if there has been no trading activity. Monthly statements are only required when there is activity in the account during that month.
Why the other options are wrong
- A. Semi-annual statements do not satisfy the minimum requirement.
- C. Annual statements are insufficient for accounts holding positions.
- D. Monthly is required only if there was activity that month.
Account Statement Frequency
Firms must send account statements monthly for accounts with activity, and at least quarterly for accounts with positions but no activity.
- Active accounts = monthly
- Positions but inactive = quarterly minimum
- No positions and no activity = no statement required
Memory trick: Busy account, monthly mail; quiet but holding, quarterly at least.