Securities Industry Essentials (SIE) ExamUnderstanding Trading, Customer Accounts, and Prohibited ActivitiesMedium
A client wants to ensure that their account statements and trade confirmations are sent to a location other than their primary residence for a temporary period while they are traveling. What is the FINRA rule regarding holding customer mail?
- AFirms may hold customer mail indefinitely as long as the client provides verbal consent.
- BFirms may hold customer mail for up to three months with written instructions from the client, or longer with a valid reason and updated instructions every three months.
- CFirms may hold customer mail for up to three months without specific instructions, provided the client is traveling.
- DFirms are prohibited from holding customer mail under any circumstances.
Show answer & explanationAnswer & explanation
Correct answer: B. Firms may hold customer mail for up to three months with written instructions from the client, or longer with a valid reason and updated instructions every three months.
FINRA rules permit firms to hold customer mail, such as statements and confirmations, for up to three months upon written request from the customer. For periods longer than three months, there must be a valid reason, and the customer must provide updated written instructions every three months.
Why the other options are wrong
- A. Verbal consent is insufficient; written instructions are required, and indefinite holding is not permitted.
- C. Written instructions are always required, not just implied by travel.
- D. Firms are allowed to hold mail under specific conditions.
Holding Customer Mail
The practice of a brokerage firm retaining a customer's account statements and trade confirmations instead of mailing them.
- Requires written instructions from the customer.
- Generally limited to three months.
- Can be extended beyond three months for a valid reason, with updated written instructions every three months.
- Firm must ensure prompt access to information for the customer.
Memory trick: To 'Hold' mail, you need 'Written' approval, or it 'Expires'.