A client opens a new brokerage account and wants to ensure that all their mail, including statements and trade confirmations, is sent to a post office box (P.O. Box) rather than their residential address. Under FINRA rules, what is the firm's obligation regarding this request?
- AThe firm may send mail to a P.O. Box if the client signs a waiver acknowledging the risks.
- BThe firm must refuse the request and require a residential address for all mail.
- CThe firm may send mail to a P.O. Box if the client's residential address is on file.
- DThe firm may send mail to a P.O. Box only if approved by a principal and reviewed periodically.
Show answer & explanationAnswer & explanation
Correct answer: D. The firm may send mail to a P.O. Box only if approved by a principal and reviewed periodically.
FINRA rules generally allow for mail to be sent to an alternate address, such as a P.O. Box, provided the firm has the client's residential street address on file. However, sending mail to an alternate address also requires the written approval of a qualified principal and must be subject to periodic review (at least every 6 months) to detect any potential mailing address irregularities.
Why the other options are wrong
- A. A waiver alone is insufficient; principal approval and review are regulatory requirements.
- B. This is too restrictive; P.O. Boxes are permissible under certain conditions.
- C. While having a residential address on file is necessary, principal approval and periodic review are also required.
Customer Mail Delivery
Broker-dealers must send customer mail to the most current address provided by the customer. While a P.O. Box can be used, it requires strict oversight, including principal approval and periodic review, in addition to having the residential address on file.
- Residential address must be on file.
- P.O. Box requires principal approval.
- P.O. Box usage must be reviewed periodically (e.g., every 6 months).
- Aids in fraud prevention and compliance.
Memory trick: Mail: Get the real address, P.O. Box needs boss's nod and regular checks.