FINRA Securities Industry Essentials Exam (SIE) SIE Question # 16 Topic 2 Discussion
SIE Exam Topic 2 Question 16 Discussion:
Question #: 16
Topic #: 2
A customer wants to open an account to trade covered calls and puts. Which of the followingcommunications must be provided to the customer prior to approving the account for trading?
FINRA Rule 2360 requires that customers receive theOptions Disclosure Document (ODD), published by the Options Clearing Corporation (OCC), before they are approved to trade options. The ODD explains the risks and characteristics of options trading.
D is correctbecause the ODD is mandatory for options account approval.
Ais incorrect because a prospectus is not specific to options trading.
Bis incorrect because the MSRB Investor Brochure applies to municipal securities.
Cis incorrect because a margin disclosure statement is required only for margin accounts.
[Reference:FINRA Rule 2360 (Options), ]
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