Series 26 cheat sheet

FINRA Rule 3110(c) requires an inspection of each office of supervisory jurisdiction at least annually and each non-OSJ branch office at least every three years.

A registered principal must review and approve deferred variable annuity purchases and exchanges under FINRA Rule 2330 before the transaction is transmitted for processing.

FINRA Rule 3220 limits gifts or gratuities to $100 per person per year unless the member obtains prior written consent.

Associated persons must give prior written notice of outside business activities; the member must evaluate and may approve or reject the activity under FINRA Rule 3270.

Private securities transactions require prior written notice; the member must record and supervise the transaction or expressly disapprove it under FINRA Rule 3280.

FINRA Rule 2210 requires a registered principal to approve retail communications before use and requires retention of communications and approval records for three years.

Customer complaints must be reviewed, investigated, and responded to; a complaint log and related records must be maintained and certain events reported to FINRA.

Written supervisory procedures must assign supervisory responsibilities to registered principals and describe review of accounts, correspondence, and transactions.

A member must review and approve variable contract and mutual fund sales literature for fair balance, risk disclosure, and no misleading performance claims.

The Investment Company Act of 1940 classifies investment companies as management companies (open-end or closed-end), unit investment trusts, or face-amount certificate companies.

Open-end fund shares are redeemable at NAV, and the fund must compute NAV at least once each business day using forward pricing.

Closed-end fund shares generally trade on an exchange and are not continuously redeemable; market price may be above or below NAV.

A unit investment trust holds a fixed portfolio, has no investment adviser managing the portfolio, and terminates on a specified date.

A diversified investment company must invest at least 75% of assets in cash, government securities, and other securities limited to 5% per issuer and 10% of voting securities.

Front-end sales loads may be reduced by breakpoints, rights of accumulation, and letters of intent.

Class A shares typically carry a front-end load; Class B shares typically carry a contingent deferred sales charge; Class C shares typically carry a level load.

Money market funds seek a stable $1 NAV and operate under SEC Rule 2a-7 maturity and credit quality limits.

A mutual fund must deliver a prospectus before or with the sale; a summary prospectus may be used if it meets SEC requirements.

Variable annuity and variable life contracts are securities registered under the Securities Act of 1933 and are sold by prospectus.

Variable contract assets are held in a separate account registered as an investment company under the Investment Company Act of 1940.

Separate account assets are segregated from the insurer's general account, and contract values fluctuate with the underlying subaccounts.

Accumulation units measure value during the accumulation phase; annuity units measure income payments during the payout phase.

FINRA Rule 2330 requires reasonable-basis and customer-specific suitability determinations for deferred variable annuities, including exchange analysis.

A variable annuity exchange requires comparison of surrender charges, new surrender periods, fees, and benefits, and may qualify for tax deferral under Section 1035.

Variable life insurance death benefits may vary with subaccount performance, subject to any guaranteed minimum death benefit.

Typical variable contract charges include mortality and expense risk fees, administrative fees, subaccount expenses, surrender charges, and rider costs.

Selling variable contracts requires both FINRA registration and a state insurance license.

Form U4 must be filed to register associated persons; fingerprints and required disclosures are submitted through FINRA's registration system.

FINRA continuing education has a Regulatory Element due within 120 days of the second anniversary of registration and every three years thereafter, plus an annual Firm Element.

Form U5 must be filed within 30 days after termination of registration and amended within 30 days of learning of a reportable event.

FINRA Rule 4530 requires reporting of specified events, including certain customer complaints, arbitrations, and regulatory actions.

An AML program must include a designated AML compliance officer, customer identification procedures, monitoring, and SAR filing within 30 days of detection.

Currency transaction reports are required for cash transactions exceeding $10,000; SARs are confidential and not disclosed to the customer.

Regulation S-P requires privacy notices, opt-out rights where applicable, and safeguards for customer nonpublic personal information.

A member's written supervisory procedures must be reviewed and updated as business and regulations change, and a designated principal must supervise compliance.

Statutory disqualification bars registration absent FINRA approval; Form U4 asks about criminal, regulatory, and financial disclosures.