Question 4

A broker-dealer is required to send a statement to customers with cash or positions at least quarterly.

Broker-dealers must provide account statements to customers at a minimum of every three months, which aligns with the quarterly requirement set by FINRA rules. This ensures that customers are kept informed about their account holdings and any transactions that have occurred.

A) monthly.

While sending statements monthly is beneficial for frequent updates, it is not the minimum requirement set by FINRA. Monthly statements may be offered, but the regulatory standard is to provide them quarterly.

B) quarterly.

This option is correct as per FINRA regulations, which specify that account statements must be sent to customers at least once every three months. This frequency is designed to keep customers adequately informed about their account status.

C) semiannually.

Sending statements semiannually does not meet the minimum standard required by FINRA. This option is too infrequent to ensure that customers are aware of their account activity and balances.

D) annually.

An annual statement is insufficient under FINRA rules, as it does not provide the timely information necessary for customers to manage their accounts effectively. The requirement is set to inform clients at least quarterly.

Conclusion

The requirement for broker-dealers to send account statements at least quarterly is crucial for maintaining transparency and communication with customers. Option B is the only choice that aligns with FINRA regulations, while all other options fall short of the minimum standards established for customer account communication.