Suitability Rules
Which suitability obligation requires that a recommendation be suitable for at least some investors?
Reasonable-basis suitability requires that a recommendation be suitable for at least some investors based on the product's characteristics. This requires the representative to understand the product before recommending i
Complete Analysis & Legal Rationale
Reasonable-basis suitability requires that a recommendation be suitable for at least some investors based on the product's characteristics. This requires the representative to understand the product before recommending it to anyone. Customer-specific suitability then considers the individual customer.
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:
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Official Standard: Requires reasonable-basis, customer-specific, and quantitative suitability for recommendations (verify current text).
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.