FINRA Series 6 Investment Company and Variable Contracts Products Representative ExaminationProcessing Customer Orders and TransactionsEasy
A client submits a written complaint alleging a registered representative engaged in unauthorized trading. According to FINRA rules, what is the firm's obligation regarding this complaint?
- AThe firm must investigate the complaint, provide a written response to the client, and maintain a separate file of all written complaints for four years.
- BThe firm must investigate the complaint and respond to the client within 30 days, but no report to FINRA is required unless litigation ensues.
- CThe firm must investigate the complaint, provide a written response to the client, and keep a record of the complaint for at least one year.
- DThe firm must investigate the complaint, provide a written response to the client, and report the complaint to FINRA within 15 calendar days if it involves allegations of theft or forgery.
Show answer & explanationAnswer & explanation
Correct answer: A. The firm must investigate the complaint, provide a written response to the client, and maintain a separate file of all written complaints for four years.
FINRA Rule 4513 requires member firms to keep a separate file of all written customer complaints for at least four years. While investigation and response are implied, the specific recordkeeping and reporting requirements are key.
Why the other options are wrong
- B. This option is incorrect as FINRA reporting may be required for certain complaints, and the recordkeeping period is longer.
- C. The recordkeeping period mentioned (one year) is incorrect; it should be four years.
- D. While some complaints involving theft or forgery require U4/U5 reporting, the general recordkeeping rule for all written complaints is four years, and the 15-day timeframe for reporting is for specific events, not all complaints.
Customer Complaint Handling
The process by which financial firms receive, investigate, respond to, and record written customer grievances, as mandated by regulatory bodies like FINRA.
- Must be in writing to be considered a 'complaint' under FINRA rules.
- Firms must keep a separate file of all written complaints.
- Recordkeeping period is generally four years.
Memory trick: Complaint Four-Year File, Not Just a Smile.