FINRA Series 10 Practice Test & Mock Exam

Series 10 rewards candidates who can supervise sales-practice activity, account-opening workflows, customer-protection issues, and communications without missing the control or escalation step. If you are searching for Series 10 sample questions, a practice test, mock exam, or simulator, this is the main Securities Prep page to start on web and continue on iOS or Android with the same account. This page includes 24 sample questions with detailed explanations so you can try the exam style before opening the full app question bank.

Interactive Practice Center

Start a practice session for Series 10 below, or open the full app in a new tab. For the best experience, open the full app in a new tab and navigate with swipes/gestures or the mouse wheel—just like on your phone or tablet.

▶ Click to Load Interactive App

Open Full App in a New Tab

A small set of questions is available for free preview. Subscribers can unlock full access by signing in with the same account they use on web and mobile.

Prefer to practice on your phone or tablet? Download the Securities Prep app:

Scan for iOS (United States)

Scan for Android (United States)

• iOS: United States · Canada
• Android: United States · Canada

If you already subscribed on web or mobile, sign in with the same account here to continue on desktop.

Free diagnostic: Try the 145-question Series 10 full-length practice exam before subscribing.

What this Series 10 practice page gives you

• a direct route into the Securities Prep simulator for Series 10
• 24 sample questions with detailed explanations across the main Series 10 supervisory buckets
• targeted practice around supervision, customer protection, communications, and documentation discipline
• detailed explanations that show why the strongest supervisory response is the most defensible
• a clear free-preview path before you subscribe
• the same subscription across web and mobile

Series 10 exam snapshot

• Provider: FINRA
• Exam: General Securities Sales Supervisor (General), Part 1 of the Series 9/10 path
• Practice reference: 145 practice questions in 240 minutes
• Registration context: generally paired with SIE + Series 7, and combined with Series 9 for the full 9/10 path

Topic coverage for Series 10 practice

• Sales-practice supervision: customer protection, account maintenance, and day-to-day general securities oversight
• Control workflow: identifying risk, choosing the right control, escalating correctly, and documenting the file
• Communications and branch review: approvals, recordkeeping, and supervisory follow-through

What Series 10 is really testing

Series 10 is primarily a sales-supervision-and-customer-protection exam:

• identifying the risk in branch-level sales practice, account handling, or communications
• choosing the right control before customer harm spreads
• recognizing that authority, verification, and escalation issues matter more than business convenience
• supervising accounts, disbursements, margin, complaints, and communications through WSP-driven workflows
• picking the answer that protects the customer and leaves an audit trail of review and corrective action

Common question styles

• What should the supervisor do next?: verify, hold, approve, reject, escalate, remediate, or document
• What is the control issue?: incomplete documentation, weak authority, suitability gap, funds-movement risk, trade error, or ad-approval failure
• What is the red flag?: address change plus wire request, stale KYC, complaint pattern, misleading communication, or compensation conflict
• What is the safer branch response?: stop activity, confirm instructions, review the account, or route to compliance or AML
• What changed the answer?: account type, authority document, customer objective, margin status, or communication category

High-yield pitfalls

• approving activity before verifying identity or authority
• treating a suspicious account change as a simple service request
• focusing on the sales opportunity instead of the customer-protection issue
• solving the immediate problem without documenting the supervisory review
• relying on disclaimers to cure a misleading communication
• treating trade errors or complaints as rep-level problems instead of supervisory events

How Series 10 differs from similar routes

How to use the Series 10 simulator efficiently

1. Start with sales-practice and escalation drills so the supervisory workflow becomes automatic.
2. Review every miss until you can explain what should be controlled, documented, and escalated.
3. Move into mixed sets once you can switch between communications, account-review, and customer-protection scenarios without hesitation.
4. Finish with timed runs so the full-session pace feels controlled.

Free preview vs premium

• Free preview: 24 public sample questions on this page plus the web app entry so you can validate the question style and explanation depth.
• Premium: the full Series 10 practice bank, focused drills, mixed sets, timed mock exams, detailed explanations, and progress tracking across web and mobile.

Free samples and full bank

• Live now: this exact practice route is available in Securities Prep on web, iOS, and Android.
• On-page sample set: this page includes 24 public sample questions from the current practice coverage.
• Full app: open the Securities Prep web app or mobile app for broader timed coverage.

Good next pages after Series 10

• Series 9 if you are completing the options half of the 9/10 path
• Series 24 if the target shifts to broad broker-dealer principal supervision
• Series 14 if the real need is compliance-officer qualification rather than sales supervision
• FINRA if you want the full principal and specialist route map first

Free review resources

Use these free SecuritiesMastery.com resources for concept review, then return to this page when you are ready to practice in Securities Prep.

• Series 10 Cheat Sheet
• Series 10 Study Guide

Focused sample questions

Use these focused Series 10 sample-question pages when you want to isolate one official topic area before returning to the mixed simulator.

• Personnel Supervision
• Customer Accounts
• Sales and Trading Supervision
• Public Communications
• Free Series 10 Full-Length Practice Exam

24 Series 10 sample questions with detailed explanations

These sample questions cover multiple blueprint areas for Series 10. Use them to check your readiness here, then move into the full Securities Prep question bank for broader timed coverage.

Question 1

Topic: Function 2 — Supervise the Opening and Maintenance of Customer Accounts

A firm is reviewing a mobile-app push notification promoting margin borrowing to retail customers. Two principals propose different supervisory decisions.

Draft push (as written): “Borrow on margin at 4.25%* and trade more today.” *Footnote (tap to expand): “4.25% applies to margin debit balances over $1,000,000; other tiers up to 11.75%. Rates may change without notice. See the Margin Disclosure Statement.”

Principal 1: Approve the push as-is because the footnote and link provide the required details.

Principal 2: Do not approve until the push is revised so the material terms are clear on the initial screen (not just behind a tap), including that rates are variable and tiered, how/when interest is charged, and a balanced statement of key margin risks.

As the supervising principal, which decision best reflects the key differentiator for clear and fair margin-interest disclosures in a retail communication?

• A. Follow Principal 2’s approach and require prominent, balanced margin-rate and interest disclosures before approval
• B. Approve the push if it adds the firm’s rate formula (base rate plus markup), even if risk and accrual disclosures remain behind a tap
• C. Follow Principal 1’s approach because a linked disclosure document cures any lack of clarity in the headline claim
• D. Approve the push only if all numeric rates are removed, even if other disclosures remain unchanged

Best answer: A

Explanation: The core supervisory issue is whether the retail communication is fair and balanced about margin interest. Highlighting a low “as low as” rate while placing tiering, variability, and other material terms behind an extra step can be misleading. A principal should require prominent, plain-language disclosures about variable/tiered rates, how interest is charged, and key margin risks before approving use.

Question 2

Topic: Function 2 — Supervise the Opening and Maintenance of Customer Accounts

A retail customer with an existing cash brokerage account submits a request through the firm’s portal to add margin privileges so the customer can borrow to purchase equities. Two supervisors propose different review controls:

• Path 1: Activate margin after the rep documents a suitability rationale in the CRM.
• Path 2: Activate margin only after the customer receives the firm’s margin disclosure and signs the margin agreement, and the account change is principal-approved and recorded.

Which supervisory path is best, based on the decisive differentiator in this account change?

• A. Activate margin after documenting suitability in the CRM
• B. Activate margin only after margin disclosure, signed agreement, and principal approval
• C. Send a privacy notice update and then activate margin immediately
• D. Treat the request as a new account and redo CIP/OFAC before activation

Best answer: B

Explanation: This change adds borrowing capability and materially changes the customer’s account terms and risks. Supervisory controls should ensure required customer disclosures and the margin agreement are provided and accepted before margin is enabled. The principal should also evidence review and approval of the account change in firm records.

Question 3

Topic: Function 2 — Supervise the Opening and Maintenance of Customer Accounts

A firm’s WSPs require a daily post-trade “suitability exception” report for retail accounts that have already been opened. The report flags transactions when (1) the product’s internal risk rating is above the client’s documented risk tolerance or (2) the security’s expected holding period exceeds the client’s stated time horizon. A principal must review the flagged trade, obtain and document the registered representative’s rationale (and any updated customer profile information), and determine whether the transaction should stand.

Which supervisory purpose does this control feature primarily support?

• A. Verifying the customer’s identity under the firm’s CIP before trading
• B. Detecting potential insider trading by reviewing unusual volume and news events
• C. Confirming transactions align with the customer’s objectives, risk tolerance, and time horizon
• D. Ensuring mutual fund purchases receive applicable breakpoint discounts

Best answer: C

Explanation: This is a post-trade supervisory review that compares each flagged transaction to the customer’s documented profile. By requiring principal follow-up, documentation, and a determination to affirm or remediate the trade, the firm is applying best-interest and suitability principles to activity occurring after the account is opened.

Question 4

Topic: Function 1 — Supervise Associated Persons and Personnel Management Activities

In a broker-dealer, which statement best defines the purpose of supervisory control policies and procedures as they relate to supervising supervisory personnel?

• A. They are the firm’s AML transaction-monitoring processes used to detect suspicious activity for reporting
• B. They are the day-to-day trade and correspondence reviews performed by a registered principal over associated persons
• C. They are the firm’s periodic branch inspection program focused on premises, signage, and recordkeeping
• D. They provide independent testing and verification that supervisory reviews are being performed effectively, with clear accountability and escalation when deficiencies are found

Best answer: D

Explanation: Supervisory control policies and procedures are the firm’s checks on its supervision, including oversight of supervisors. Their focus is independence and accountability—testing whether supervisory reviews occur as designed and requiring follow-up and escalation when gaps are identified. This is distinct from routine line supervision performed over representatives.

Question 5

Topic: Function 3 — Supervise Sales Practices and General Trading Activities

Your firm allows registered representatives to maintain personal brokerage accounts at outside broker-dealers. As the principal updating the WSPs, you want a control that (1) documents firm approval of the outside account and any exceptions, and (2) enables ongoing surveillance of the employee’s trading activity.

Which supervisory control feature best matches that objective?

• A. Require written notice and firm approval for outside accounts, plus duplicate confirms/statements for review
• B. Deliver an annual privacy notice to employees describing how the firm shares nonpublic information
• C. Prohibit employees from soliciting or accepting customer orders in their personal accounts
• D. Require pre-approval of each employee trade through a centralized preclearance system

Best answer: A

Explanation: Supervising employee personal trading in outside accounts requires both an approval trail and a reliable feed of activity for review. A written notice/approval process establishes documentation, while receiving duplicate trade confirmations and account statements allows the firm to monitor for conflicts, misuse of information, and other problematic patterns. Together, these elements support enforceable controls and evidentiary recordkeeping.

Question 6

Topic: Function 2 — Supervise the Opening and Maintenance of Customer Accounts

A retail customer has a margin call due to a market decline and wants to avoid the firm liquidating her exchange-listed ETF position. She proposes transferring in shares of an OTC microcap stock she owns at another firm. Your firm’s margin department has designated the OTC microcap as non-marginable (100% margin requirement).

As the supervising principal, what is the primary limitation that should drive your decision on whether this plan will prevent a liquidation?

• A. T+1 settlement timing could delay posting the OTC shares to the account
• B. The non-marginable OTC stock will not increase collateral value for the call
• C. The customer’s request indicates possible excessive trading in the account
• D. The ETF may gap down further before the next margin calculation

Best answer: B

Explanation: Margin calls and liquidation planning depend on what positions provide margin collateral (loan value). Because the proposed OTC microcap is designated non-marginable, it will not count toward required equity and will not cure the margin deficiency. The supervisor should therefore assume the firm may still need cash or margin-eligible securities to meet the call and avoid liquidation.

Question 7

Topic: Function 2 — Supervise the Opening and Maintenance of Customer Accounts

A firm mails paper trade confirmations and monthly statements to a retail customer. In the last 30 days, two trade confirmations and the monthly statement were returned as “undeliverable.” The registered rep says the customer “moved” and provides a new address obtained from a neighbor, and asks the OSJ principal to update the account so a new trade can be entered today.

Which supervisory action best complies with durable supervision standards for undeliverable communications?

• A. Change the address based on the rep’s information
• B. Liquidate positions and close the account immediately
• C. Restrict account; independently verify address; document and escalate
• D. Continue trading; hold future mail at the branch

Best answer: C

Explanation: Multiple pieces of returned mail indicate the firm may not be delivering required confirmations and statements, and it can also signal account takeover or fraud. A supervisor should require documented customer contact using reliable channels and independent address validation before updating records. Placing reasonable restrictions and escalating to compliance helps ensure communications resume accurately and timely once the address is confirmed.

Question 8

Topic: Function 1 — Supervise Associated Persons and Personnel Management Activities

A broker-dealer wants a supervisory control to ensure corrective actions taken against a registered representative are consistent and defensible. The control requires a contemporaneous written record that states (1) what conduct triggered the action, (2) what restrictions/conditions are imposed, (3) who is responsible for supervision, (4) the review cadence and how reviews will be evidenced, and (5) when and how the action will be reevaluated and closed.

Which supervisory tool best matches this control feature?

• A. The firm’s annual branch inspection checklist and report
• B. Automated exception reports that flag trading or suitability outliers
• C. A customer complaint log with required intake fields
• D. A written heightened supervision plan maintained in the rep’s supervisory file

Best answer: D

Explanation: The described feature is a formal, documented corrective-action framework tied to a specific representative, including ownership, scope, evidence of review, and a defined reevaluation/closure process. That is the purpose of a heightened supervision plan, which creates an auditable record showing why the firm acted, what it required, and how it supervised to the plan.

Question 9

Topic: Function 3 — Supervise Sales Practices and General Trading Activities

A Nasdaq-listed stock (LMNO) is subject to an exchange trading halt.

Exhibit: Halt notice and firm exception report

Halt (LMNO): 11:07:40 ET
Resume (LMNO): 11:22:10 ET

Executions (LMNO)
Time       Qty   Price
11:06:55   500   18.42
11:09:12   600   18.40
11:21:59   250   18.39
11:22:35   300   18.45

Under the firm’s WSP, any execution that occurs during an exchange trading halt must be escalated immediately as a potential prohibited trade and investigated. Based on the exhibit, how many shares must the principal escalate as executed during the halt?

• A. 850 shares
• B. 600 shares
• C. 1,150 shares
• D. 1,350 shares

Best answer: A

Explanation: During an exchange-imposed trading halt, the member must not effect transactions until the security resumes trading. The supervisor should identify executions that occurred after the halt time but before the resume time and escalate them as exceptions. Here, that requires summing the quantities of the executions that fall within the halt window.

Question 10

Topic: Function 3 — Supervise Sales Practices and General Trading Activities

A sales supervisor reviews a quarterly employee-trading exception report and sees that a registered representative has been actively trading the same thinly traded microcap stocks that the rep has been recommending to retail customers. The rep also appears to be using an undisclosed external brokerage account. The supervisor gives the rep a verbal warning to “stop trading those names,” but does not escalate the matter to Compliance, document any investigative steps, or place interim controls (e.g., heightened review, temporary restrictions) while the issue is reviewed.

What is the most likely outcome of this supervisory decision if FINRA later examines the firm after customer complaints arise?

• A. The firm’s primary obligation is to immediately file a SAR with FinCEN and notify all affected customers within 24 hours
• B. The firm is likely to be cited for supervisory and recordkeeping failures because it cannot evidence a reasonable investigation or interim controls, and the activity may have continued
• C. The clearing firm will automatically cancel the rep’s trades once an exception report is generated, eliminating customer-harm and supervision risk
• D. No material regulatory exposure exists because the supervisor instructed the rep to stop and employee accounts are outside the firm’s supervisory scope

Best answer: B

Explanation: When suspicious employee trading is detected, a supervisor is expected to escalate to Compliance, document the investigation, and implement interim controls while the facts are reviewed. A verbal warning with no documented follow-up leaves the firm unable to demonstrate reasonable supervision and creates a clear path for continued misconduct and customer harm. That combination commonly results in exam findings and remediation obligations.

Question 11

Topic: Function 3 — Supervise Sales Practices and General Trading Activities

A sales supervisor approves a retail email blast comparing the firm’s ETF platform to mutual funds. The email states: “ETFs have no fees, trade instantly, and are always cheaper and more liquid than mutual funds.” It does not mention bid-ask spreads, commissions, intraday price fluctuation, or that ETFs can trade at premiums/discounts, while mutual funds transact at next-calculated NAV.

The firm later receives multiple customer complaints about unexpected trading costs and execution prices on ETF purchases.

As a supervisor, what is the most likely outcome of this control failure?

• A. No material issue exists because the ETF prospectus discloses trading costs and risks
• B. The firm’s main obligation is to file the email with the SEC before using it again
• C. The communication is likely deemed misleading, prompting corrective action and possible customer remediation
• D. The primary consequence is a suitability violation only if each customer’s profile was not updated

Best answer: C

Explanation: The email presents absolute, one-sided claims about costs and liquidity while omitting key ETF trading realities (bid-ask spread, commissions, market-price execution, and premium/discount risk) versus mutual fund NAV pricing. That imbalance makes the communication misleading and predictably leads to customer confusion and complaints. The most likely outcome is a required correction of the communication with potential regulatory action and remediation tied to customer harm.

Question 12

Topic: Function 2 — Supervise the Opening and Maintenance of Customer Accounts

A firm is adding a self-service portal that lets retail customers submit address and beneficiary changes with e-signature. Your WSPs require an OSJ principal to approve each change within one business day, and the firm must be able to promptly produce a complete audit trail (customer request, supporting documents, who approved, and time/date) for exams and customer disputes. Some RRs work remotely and currently save PDFs to local drives before emailing them to operations.

As the supervising principal, what is the BEST decision to satisfy these constraints?

• A. Require branches to print each request and store it in paper files, with approvals initialed by the OSJ principal
• B. Rely on the customer portal vendor to retain the submitted documents and keep approvals only in the principal’s email inbox
• C. Permit RRs to keep the PDFs on their local drives as long as they email operations the same day
• D. Require all maintenance requests and approvals to be captured in a centralized, access-controlled repository with indexed search and a tamper-evident audit trail; prohibit local-drive storage

Best answer: D

Explanation: Account maintenance documentation must be retained in a way that is complete, secure, and readily retrievable, including evidence of supervisory approval. A centralized repository with controlled access, indexing, and an audit trail best ensures the firm can promptly produce the full record set and demonstrate who approved what and when, regardless of where the RR works.

Question 13

Topic: Function 2 — Supervise the Opening and Maintenance of Customer Accounts

A branch manager is approving a new retail account. The customer profile shows: objective = “capital preservation,” risk tolerance = “low,” time horizon = “1–3 years,” and liquidity needs = “high.” In another part of the same form, the registered representative selected “aggressive growth” and “comfortable with significant losses.” The manager approves the account without obtaining clarification or updating the record, and the rep later recommends volatile, non-income equity products.

What is the most likely outcome of this supervisory control failure?

• A. The firm may face findings for inadequate supervision and an inability to evidence appropriate recommendations
• B. The account remains compliant if the firm updates the profile at the next annual suitability refresh
• C. The account is treated as discretionary until the customer signs a separate discretionary authorization
• D. There is no material impact as long as the customer receives standard risk disclosures before trading

Best answer: A

Explanation: Supervisors must validate that a customer’s investment profile is complete and internally consistent before approving the account and allowing recommendations. Conflicting objectives, risk tolerance, liquidity needs, and time horizon are red flags that must be resolved and documented. If not, the firm is exposed to customer harm and regulatory findings because it cannot demonstrate that later recommendations were grounded in reliable customer information.

Question 14

Topic: Function 3 — Supervise Sales Practices and General Trading Activities

A branch manager receives an emailed retail customer complaint about trades in a non-discretionary account. The firm wants to triage the complaint the same day to decide what records to pull first and whether any immediate restrictions are needed.

Complaint excerpt: “On August 6, 2025, five corporate bonds were bought in my account while I was on a flight. I did not approve these trades, and my rep never called me. The confirmations show prices that seem too high, and I was told these bonds were ‘safe like cash.’”

Which primary risk/limitation should drive the manager’s initial investigation plan?

• A. Product suitability for a conservative customer profile
• B. Possible unauthorized trading or account access misuse
• C. Potential excessive markups or pricing irregularities
• D. Inadequate risk disclosure in the representative’s statements

Best answer: B

Explanation: The most urgent theme is the allegation that trades occurred without the customer’s approval in a non-discretionary account. That drives an initial investigation focused on authorization and authentication (order-entry source, recordings, notes, and any written trading authority) and whether immediate restrictions are needed to prevent further harm. Pricing, suitability, and disclosure can be reviewed after trade authority is validated.

Question 15

Topic: Function 4 — Supervise Communications with the Public

A broker-dealer uses an email surveillance tool to flag retail-related correspondence for supervisory review. During an internal audit, the branch manager cannot show a complete record of (1) which principal reviewed each flagged email, (2) what specific language was flagged, and (3) how the issue was resolved.

Which action best brings the firm into compliance with durable correspondence supervision standards?

• A. Address issues with verbal coaching and retain only the final corrected email
• B. Have principals initial a weekly exception report listing only message counts by rep
• C. Implement a workflow that logs reviewer ID/time, flagged text, disposition, and documented follow-up
• D. Require registered reps to attest quarterly that all emails were compliant

Best answer: C

Explanation: Correspondence supervision must be demonstrable after the fact. The most durable approach is an auditable, tamper-evident record that links each flagged message to a specific reviewer, identifies what triggered the review, and shows the final supervisory outcome and any corrective action taken. This supports both oversight and regulatory/inspection testing.

Question 16

Topic: Function 1 — Supervise Associated Persons and Personnel Management Activities

Which statement about the Central Registration Depository (CRD) is most accurate?

• A. CRD is an internal firm-only personnel file, so regulators and the investing public do not rely on the information contained in it.
• B. CRD is primarily used to clear and settle customer securities transactions, and updating it is handled by operations rather than registration staff.
• C. Once an associated person is registered, CRD information generally does not need updating unless the person changes broker-dealers.
• D. CRD is FINRA’s registration database used to file and maintain associated persons’ registration and disclosure information, so firms must supervise for complete, accurate, and timely updates to support licensing decisions and regulators’ and the public’s reliance on the record.

Best answer: D

Explanation: CRD is the industry’s central registration and disclosure repository for associated persons. Because regulators and investors rely on CRD records to assess an individual’s background and eligibility, firms must treat the completeness, accuracy, and prompt updating of CRD information as a supervisory priority.

Question 17

Topic: Function 1 — Supervise Associated Persons and Personnel Management Activities

A firm is onboarding an experienced registered representative. The candidate’s Form U4 and CRD report show: (1) two customer complaints settled within the last 4 years, (2) a personal bankruptcy discharged 2 years ago, and (3) a prior termination for “failure to follow firm procedures.” The hiring manager wants the rep approved to start soliciting retail clients next week.

Which supervisory action is NOT appropriate before onboarding is finalized?

• A. Rely on the candidate’s written attestation and proceed without independent verification
• B. Contact the prior firm for additional context on the termination and related records
• C. Request supporting documentation and a written explanation for the bankruptcy and complaint history
• D. If hired, document heightened supervision and any restrictions tailored to the risk

Best answer: A

Explanation: Multiple recent complaints, a recent bankruptcy, and a termination are onboarding red flags that require enhanced due diligence. A supervisor should independently verify the facts, obtain supporting documentation, and document the firm’s decision-making and any risk-based restrictions. Simply accepting the applicant’s attestation does not satisfy a reasonable qualification review before final approval.

Question 18

Topic: Function 4 — Supervise Communications with the Public

A retail branch uses an outside dialing platform for outbound prospecting. Two customers complain that they told a registered representative “do not call me again,” but they received another call the next week.

The firm’s WSPs state that telemarketing call lists must be scrubbed against the National Do-Not-Call Registry at least every 31 days and against the firm’s internal do-not-call (DNC) list before each campaign.

Which supervisory action best complies with durable telemarketing supervision standards for maintaining and using DNC lists?

• A. Stop calling any customer who requests it, but only after a principal approves the request in writing to avoid improper suppression
• B. Implement a centralized internal DNC log integrated with the dialer, require reps to enter DNC requests immediately, scrub calling lists per WSPs before campaigns, and periodically test/audit for compliance
• C. Rely on the dialing vendor’s certification that it scrubs numbers and do not maintain a separate firm internal DNC list
• D. Allow each representative to maintain a personal DNC spreadsheet and review the spreadsheets during the annual branch inspection

Best answer: B

Explanation: A supervised telemarketing program needs controls that prevent repeat calls by design, not after-the-fact reviews. The best approach is a centralized, promptly updated internal DNC process that is actually used to scrub outbound call lists, with documentation and periodic testing to verify the control is working in production.

Question 19

Topic: Function 2 — Supervise the Opening and Maintenance of Customer Accounts

A firm’s automated margin system fails to generate a Regulation T initial margin call after a retail customer purchases $100,000 of common stock in a margin account. The customer has only $30,000 equity in the account and, because the call was never generated, is allowed to withdraw $5,000 two business days later.

Exhibit: Firm WSP (excerpt)

• Initial margin requirement: 50%
• Reg T call must be met within 4 business days
• No withdrawals are permitted while a Reg T call is outstanding
• If not met by the due date, the firm must liquidate and place the account on 90-day restricted status

If this control failure is not promptly corrected, what is the most likely outcome?

• A. No action is required because the customer still has positive equity in the account
• B. The account must be closed immediately and the customer must be reported as a suspected AML case
• C. The firm will be deemed to have improperly extended credit and must liquidate and restrict the account
• D. The only consequence is delayed settlement, so the firm should rebook the trade for the next business day

Best answer: C

Explanation: The firm’s failure to issue and enforce the Regulation T call, combined with permitting a withdrawal, results in the firm financing the customer’s purchase beyond permitted initial margin. That is an improper extension of credit requiring corrective action consistent with the WSP, including liquidation if the call is not met and restricting future trading privileges.

Question 20

Topic: Function 2 — Supervise the Opening and Maintenance of Customer Accounts

A long-time retail customer submits an online request to (1) change the mailing address, (2) switch statements to e-delivery, and (3) add a new linked bank account for outgoing ACH transfers. The request is submitted after hours from an unfamiliar device and geolocation. The registered representative says the customer e-signed the request and asks operations to process it immediately.

As the supervising principal, which action best meets high-level supervisory standards for required customer notices/disclosures during account changes?

• A. Process the changes because the customer used e-signature and the request came through the firm’s portal
• B. Allow the representative to attest that they recognize the customer and then release the first ACH transfer as a test
• C. Email a confirmation to the customer’s new email address only, since they elected e-delivery
• D. Place a disbursement hold, independently verify using prior contact info, send confirmation to old and new addresses, and document principal approval

Best answer: D

Explanation: When multiple high-risk changes occur together (address, delivery method, and linked bank instructions), supervision should require independent verification and customer notification using existing contact channels. Adding a temporary disbursement restriction until verification is completed helps prevent fraudulent withdrawals. Documented principal approval and record retention provide an auditable control for the account-maintenance change.

Question 21

Topic: Function 2 — Supervise the Opening and Maintenance of Customer Accounts

You are the designated principal reviewing a new retail account in the firm’s online account-opening system. Based on the exhibit, which interpretation is supported?

Exhibit: New account documentation status (02/10/2026 10:14 ET)

Account type selected: Individual
Trading permissions: Equities
Margin feature toggle: ON

Customer agreement (includes arbitration language):
- Delivered: e-sign 02/10/2026 09:58
- Customer acknowledgment: 02/10/2026 10:02

Margin agreement:
- Delivered: e-sign 02/10/2026 09:58
- Customer signature: PENDING

Margin disclosure statement:
- Delivered: e-sign 02/10/2026 09:58
- Customer acknowledgment: PENDING

• A. Margin should not be enabled until the margin agreement and disclosure are acknowledged
• B. Margin may be enabled because the margin documents were delivered electronically
• C. Margin may be enabled because the customer agreement was acknowledged
• D. The account cannot be opened until the customer separately initials the arbitration clause

Best answer: A

Explanation: Margin trading requires the firm to deliver the required margin documents and obtain the customer’s agreement/acknowledgment before extending margin. The exhibit shows the customer agreement was acknowledged, but the margin agreement signature and the margin disclosure acknowledgment are both pending while margin is already toggled on. A supervisor should interpret this as a control failure that must be corrected before approving margin use.

Question 22

Topic: Function 3 — Supervise Sales Practices and General Trading Activities

A retail customer’s online limit order to buy 1,000 shares of ABC executed on June 3, 2025. The order ticket shows the customer entered the correct symbol, but the registered rep mistakenly routed and executed 1,000 shares of ABX at $38.20. The customer would have received ABC at $37.90 at the time of execution. The trade will be corrected and the customer will be made whole.

Two supervisors propose different documentation approaches:

• Path 1: Open an “error case” in the firm’s trade-error log and attach (1) root-cause narrative, (2) timestamped approvals for the correction and any error-account use, (3) customer impact calculation (price difference, commissions/fees, and any interest), (4) record of customer notification, and (5) final resolution evidence (corrected trade details and related confirms).
• Path 2: Process a cancel/rebill in the order management system and retain only the system audit trail plus an email from the trading desk stating “wrong symbol—fixed.”

As the supervising principal, which supervisory path best meets the audit-purpose requirement to document the trade error lifecycle (cause, approvals, customer impact, and resolution)?

• A. Retain only the corrected confirmation and make-whole credit
• B. Require Path 1 documentation
• C. Require Path 2 documentation
• D. Document the root cause during the next periodic supervisory review

Best answer: B

Explanation: The firm should maintain an audit-ready error file that shows what happened, who approved the correction, how the customer was made whole, and how the error was resolved. A system cancel/rebill trail alone typically does not evidence supervisory approvals or the customer-impact analysis. Path 1 explicitly captures the full lifecycle needed for supervision and audit support.

Question 23

Topic: Function 2 — Supervise the Opening and Maintenance of Customer Accounts

Which statement is most accurate about refreshing a retail customer’s investment profile before approving a recommendation or transaction?

• A. A supervisor may approve activity using prior profile data as long as the registered representative verbally confirms nothing has changed, even if the account record is not updated.
• B. Customer investment profile information only needs to be updated at account opening unless the customer submits written changes.
• C. If existing profile information appears stale, incomplete, or inconsistent with the proposed activity, the firm should obtain and document updated customer information (or document the customer’s refusal) before approving the activity.
• D. FINRA rules require updating every retail customer’s investment profile at least annually, regardless of account activity or changes.

Best answer: C

Explanation: Supervisory approval must be based on reasonably current customer information, especially when a proposed recommendation conflicts with, or depends on, profile details that may no longer be accurate. When information is missing, outdated, or contradicted by known facts, the firm should refresh and document the profile before approval. If the customer will not provide updates, that refusal should be documented as part of the approval record.

Question 24

Topic: Function 2 — Supervise the Opening and Maintenance of Customer Accounts

A general securities sales supervisor is reviewing a new account package submitted through the firm’s digital onboarding system for a retail customer that is a domestic LLC.

Exhibit: New account KYC snapshot (selected fields)

Account registration: ABC Fitness Studio LLC (domestic LLC)
Entity exemption status: Not indicated as exempt
Authorized signer: Maria Lopez (Managing Member)
Signer ID validation: Driver’s license scan = VERIFIED
Entity documentation: Articles of Organization = RECEIVED
Tax ID: EIN 12-3456789
Beneficial Ownership Certification: PENDING (not received)
Beneficial owners (25%+): —
Control person: —

Based on the exhibit, which interpretation is best supported for the supervisor’s account-approval decision?

• A. The account may be approved because the EIN and formation documents satisfy customer identification
• B. The account must be rejected because digital ID validation cannot be used for CIP documentation
• C. The account may be approved if beneficial ownership is collected at the next periodic account update
• D. The account should not be approved until beneficial ownership and control-person information is obtained and documented

Best answer: D

Explanation: For a non-exempt legal entity customer, the supervisor must ensure the firm has collected and documented beneficial ownership information (owners and a control person) in addition to other CIP elements. The exhibit shows the certification is pending and the beneficial owner/control-person fields are blank. That supports withholding approval until required verification steps are completed and documented.

Series 10 sales supervision map

Use this map after the sample questions to connect individual items to branch supervision, retail activity review, communications, complaints, customer account controls, and escalation decisions these Securities Prep samples test.

    flowchart LR
	  S1["Branch account trade or conduct event"] --> S2
	  S2["Identify supervisory trigger and risk"] --> S3
	  S3["Review customer facts product and representative activity"] --> S4
	  S4["Approve reject escalate or remediate"] --> S5
	  S5["Document evidence and client communication"] --> S6
	  S6["Monitor trends training and controls"]

Quick Cheat Sheet

Mini Glossary

• Supervision: Firm process for review, approval, escalation, and evidence of compliance.
• Communications: Retail and institutional content subject to approval, recordkeeping, and fair-balanced standards.
• Suitability: Assessment that a recommendation fits the customer profile and the representative’s obligations.
• Customer profile: Facts such as objective, risk tolerance, liquidity need, time horizon, tax status, and constraints.
• AML: Anti-money laundering controls for identifying, monitoring, and reporting suspicious activity.

In this section

• Series 10: Personnel Supervision
  Try 10 focused Series 10 questions on Personnel Supervision, with explanations, then continue with the full Securities Prep practice test.
• Series 10: Customer Accounts
  Try 10 focused Series 10 questions on Customer Accounts, with explanations, then continue with the full Securities Prep practice test.
• Series 10: Sales and Trading Supervision
  Try 10 focused Series 10 questions on Sales and Trading Supervision, with explanations, then continue with the full Securities Prep practice test.
• Series 10: Public Communications
  Try 10 focused Series 10 questions on Public Communications, with explanations, then continue with the full Securities Prep practice test.
• Free Series 10 Full-Length Practice Exam: 145 Questions
  Try 145 free Series 10 practice questions across the official topic areas, with answers and explanations, then continue with the full Securities Prep question bank.