Finra
A customer grants their registered representative discretionary authority over their account. Which activity must be supervised?
All discretionary trades require principal review. When a rep has discretion, each trade must be marked as discretionary and is subject to heightened supervision. This oversight helps prevent abuse of the authority grant
Complete Analysis & Legal Rationale
All discretionary trades require principal review. When a rep has discretion, each trade must be marked as discretionary and is subject to heightened supervision. This oversight helps prevent abuse of the authority granted by the 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 concept in the explanation.
Does not match the governing concept in the explanation.
Does not match the governing concept in the explanation.
Matches the verified teaching point in the explanation.
Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA Series 7 outline.