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Official Practice ProblemFINRA Series 7 Blueprint: Function 3
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Question #2111Function 3Moderate

SEC Form CRS (Relationship Summary): Content and Delivery Deadlines

Under Exchange Act Rule 17a-14, when must a broker-dealer deliver Form CRS (Customer Relationship Summary) to a prospective retail investor?

Correct Choice: A

Form CRS must be delivered at the EARLIEST of: making a recommendation, placing an order, or opening an account for a retail investor.

Complete Analysis & Legal Rationale

SEC Exchange Act Rule 17a-14 requires broker-dealers and registered investment advisers to deliver a brief relationship summary (Form CRS) to retail investors. Form CRS provides standardized, plain-English disclosures regarding: (1) Services offered, (2) Fees and costs, (3) Standard of conduct (Reg BI), (4) Conflicts of interest, and (5) Disciplinary history. Delivery must occur before or at the earliest of a recommendation, placing an order, or opening an account.

Distractor Autopsy (Why Other Options Are Traps)

FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:

Choice ACorrect
None

Form CRS must be delivered at the EARLIEST of: making a recommendation, placing an order, or opening an account for a retail investor.

Choice BIncorrect
Suitability Principles Trap

Fails to adhere to suitability standards regarding B.

Choice CIncorrect
Suitability Principles Trap

Fails to adhere to suitability standards regarding C.

Choice DIncorrect
Suitability Principles Trap

Fails to adhere to suitability standards regarding D.

Authorities & References:

Official Standard: SEC Exchange Act Rule 17a-14 requires broker-dealers and registered investment advisers to deliver a brief relationship summary (Form CRS) to retail i

Official SourceSEC Exchange Act Rule 17a-14 (Form CRS) — Suitability and Conduct Standards
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Regulatory Authority & Citations: Primary Legal Sources

Verified citations governing Question #2111 (FINRA Series 7 Content Outline)

To pass the FINRA Series 7, candidates must understand not just the calculation formulas, but the exact federal securities acts, SRO rulebooks, and statutory frameworks that enforce them. Review the primary authority records below:

SECExchange Act Rule 17a-14 (Form CRS)— Suitability and Conduct Standards

SEC Exchange Act Rule 17a-14 requires broker-dealers and registered investment advisers to deliver a brief relationship summary (Form CRS) to retail i

Read SEC Official Rule
Curriculum Deep Dive • Chapter 10

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Review comprehensive FINRA blueprint concepts, calculation rules, and trap warnings in Customer Suitability & Recommendations.

Open Chapter 10 Lesson →Series 7 Cheat Sheet
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