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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What type of communication does not require principal approval before being sent?

Retail communication
Correspondence with individual investors
Public advertisements
Promotional pieces to non-institutional investors

The correct answer is: Correspondence with individual investors

Correspondence with individual investors is the type of communication that does not require principal approval before being sent. This includes one-on-one interactions, such as emails or letters, that are personalized and directed at specific individuals. The regulatory framework allows for this type of communication to be considered less risky because it is tailored to the particular circumstances and characteristics of the individual investor, reducing the potential for misunderstanding or misrepresentation. In contrast, retail communication, public advertisements, and promotional pieces to non-institutional investors typically involve broader audiences and present greater compliance risks. These types of communications are subject to more stringent regulations due to the likelihood of disseminating potentially misleading information or creating unsuitable expectations among a wider group of clients. As a result, they require principal approval prior to distribution to ensure compliance with regulatory standards and protection for investors.