General Securities Sales Supervisor (Series10) Practice Exam

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Which of the following statements is NOT true about operating a broker-dealer branch in a bank?

The SIPC sign must be visible in the broker-dealer branch
Promotional materials must include the broker-dealer’s and the bank’s names
Bank employees can enter the branch only if they are registered
New clients must receive a verbal and written "NOT-NOT-MAY" disclosure

The correct answer is: Promotional materials must include the broker-dealer’s and the bank’s names

The statement indicating that promotional materials must include both the broker-dealer’s and the bank’s names is actually true and aligns with regulatory requirements that aim to provide clear and accurate information to clients. When a broker-dealer operates within a bank, it is essential to ensure that clients are aware of the distinct nature of services provided by both entities. The inclusion of both names helps clarify the relationship and delineates the responsibilities of each party in any financial transactions. Conversely, promotions that do not accurately represent both the broker-dealer and the bank may lead to client confusion, misunderstandings about service offerings, and potential regulatory issues. This understanding supports the integrity of the information provided to clients, ensuring they are fully informed and can make educated choices regarding their financial services.