SIE Overview of the Regulatory Framework Question 12: Answer and Explanation

Question: 12

Which of the following statements is true regarding FINRA Rule 2060 – Use of Information Obtained in Fiduciary Capacity?

• A. A member firm may not use information from its customers to send marketing information to them.
• B. A member firm may not use information about its associated person to send them business-related correspondence.
• C. A member firm may not correct errors in customer account profile records without written permission from its customers.
• D. A member firm serving in recordkeeping during a securities distribution may not use that information to encourage transactions with the owners unless the issue instructs the firm to do so.

Correct Answer: D

Explanation:

D: Choice D is correct because the information is the property of the issuer, and the member firm should only use it for the stated service the member is providing, unless the issuer directs otherwise. Choices A, B, and C are incorrect because FINRA Rule 2060 – Use of Information Obtained in Fiduciary Capacity does not prohibit a firm assisting an issuing corporation from fulfilling normal duties assigned by the issuer, which could include sending marketing information about the issuer's public offer, or other business correspondence, to the customers, and correcting customer records.