FINRA Series 7Processes and Confirms TransactionsEasy
A customer's margin account has activity (trades) every month. How frequently must the broker-dealer send account statements to this customer?
- AAnnually
- BQuarterly
- CMonthly
- DSemi-annually
Show answer & explanationAnswer & explanation
Correct answer: C. Monthly
FINRA rules require that account statements be sent monthly to customers whose accounts had activity (such as trades) during the period. Inactive accounts need only receive statements quarterly.
Why the other options are wrong
- A. Annual statements do not satisfy FINRA's activity-based frequency requirement.
- B. Quarterly statements are the minimum for inactive accounts, not active ones.
- D. Semi-annual is too infrequent for an active account.
Account Statement Frequency
Broker-dealers must send account statements monthly to customers with account activity and at least quarterly to customers with securities positions but no activity.
- Active accounts: monthly statements required
- Inactive accounts with holdings: quarterly minimum
- Statements must reflect all positions, balances, and activity
Memory trick: Busy account, busy mailbox — monthly mail.