General Securities Sales Supervisor (Series10) Practice Exam

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Study for the General Securities Sales Supervisor (Series10) exam. Prepare with flashcards and multiple-choice questions, each question has hints and explanations. Get ready for your exam!

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A municipal principal must adhere to which rules?

SEC rules only
State securities laws only
MSRB rules only
All the above rules

The correct answer is: MSRB rules only

A municipal principal is primarily governed by the rules established by the Municipal Securities Rulemaking Board (MSRB). The MSRB sets forth the regulations that govern the conduct of brokers and dealers in the municipal securities market, which includes the responsibilities of municipal principals. These rules focus on ensuring fair practices, protecting investors, and maintaining market integrity. While the SEC rules and state securities laws are important, the specific role of a municipal principal centers on compliance with MSRB regulations. This includes guidance on issues like client interactions, trading practices, and the proper handling of municipal securities, which are unique to this segment of the securities industry. Therefore, the recognition of MSRB rules as the primary governing body for municipal principals highlights the specialized nature of municipal securities and reinforces the necessity for professionals in this field to adhere to these specific guidelines above others.