Series 23 — General Securities Principal Exam - Sales Supervisor Module Quick Reference

Last revised: June 29, 2026

Compact supervisory rules, decision tables, formulas, and exam traps for FINRA Series 23 preparation.

How to Use This Quick Reference

This independent Quick Reference is for candidates preparing for FINRA’s Series 23 — General Securities Principal Exam - Sales Supervisor Module, exam code Series 23. Use it as a final-pass checklist for supervisory judgment, rule distinctions, and scenario recognition.

For Series 23 questions, think like a principal:

Prevent violations through written supervisory procedures, training, registration controls, and preapproval where required.
Detect problems through reviews, exception reports, surveillance, branch inspections, and complaint analysis.
Escalate and document red flags. A correct answer often includes evidence of follow-up, not just “reviewed.”
Separate sales supervision from broader principal supervision: trading, market making, investment banking, research, communications, financial responsibility, and firm-level controls may be tested.

Supervisory Framework: High-Yield Map

Area	Principal focus	Exam trigger
Registration and qualification	Proper registration before activity; Form U4/U5 accuracy; statutory disqualification controls	Unregistered person solicits, supervises, trades, or is paid transaction compensation
WSPs and supervisory system	Written procedures reasonably designed for the business; designated principals; evidence of review	“No one was assigned,” stale procedures, ignored exception reports
Branch and OSJ supervision	Office classification, inspections, remote supervision, escalation	Producing manager, distant branch, high-risk rep, customer complaints
Communications	Correct category, approval, filing if required, fair and balanced content	Social media post, seminar script, fund performance, promissory language
Customer accounts	CIP, KYC, trusted contact, account approval, suitability/Reg BI, discretionary authority	New account, senior investor, rollover, complex product recommendation
Sales practices	Gifts, borrowing/lending, sharing accounts, outside business activities, private securities transactions	Rep borrows from customer, sells private deal, guarantees loss
Trading and market making	Best execution, order handling, limit order protection, short sale rules, trade reporting	Firm trades ahead, ignores NBBO, mismarks order, late/corrected report
Investment banking and research	Due diligence, underwriting compensation, IPO allocation, Reg M, research conflicts	Analyst pressure, restricted persons, stabilization, quiet-period issue
Financial responsibility	Net capital awareness, customer protection, books and records, confirmations/statements	Customer funds misuse, inaccurate records, capital strain from new activity
AML and privacy	CIP, suspicious activity escalation, OFAC/sanctions controls, no tipping off, data safeguards	Structuring, unusual wires, third-party checks, privacy breach

Core FINRA Supervision Rules and Concepts

Topic	What to remember	Common trap
FINRA Rule 3110 supervision	Firm must establish and maintain a supervisory system reasonably designed to achieve compliance. WSPs must identify responsible supervisors and review steps.	“We had a manual” is not enough if no one followed it or procedures did not match the business.
FINRA Rule 3120 supervisory control testing	Firm must test and verify supervisory procedures and amend them when needed.	Annual testing cannot be a checklist exercise that ignores known failures.
FINRA Rule 3130 certification	Senior executive certification process requires review of compliance and supervisory systems.	Certification does not replace actual testing and remediation.
Branch inspections	OSJs and supervisory branches require more frequent inspection than non-supervisory locations.	A high-risk branch may require more attention than the minimum cycle.
Producing manager supervision	A manager who produces revenue must be supervised by someone with independence.	Allowing a producing manager to approve their own activity is a red flag.
Exception reports	Reports are tools; supervisors must review, investigate, escalate, and document.	“Exception generated” is not the same as “exception resolved.”
Heightened supervision	Used for higher-risk reps, products, branches, or patterns of complaints.	Heightened supervision must be tailored and documented, not merely punitive.
Books and records	Required records must be accurate, preserved, and retrievable.	Business texts, emails, chats, and social media can be firm records.
Business continuity	Firm must plan for emergency communications, data backup, customer access, and alternate operations.	BCP must be reasonably current and tested.

OSJ, Branch, and Office Classification

Classification issue	Key point
OSJ trigger	Common OSJ functions include final acceptance of new accounts, review/endorsement of orders, final approval of retail communications, market making/order execution, structuring offerings, or supervising other offices.
Branch office	Location where securities business is conducted, subject to registration and supervision unless an exclusion applies.
Non-branch location	Still requires supervision if firm business occurs there. “Not a branch” does not mean “not supervised.”
Remote work	Must fit WSPs, books-and-records capture, communications supervision, privacy safeguards, and customer protection controls.
Inspection priorities	Complaints, disciplinary history, outside activities, high production, complex products, penny stocks, senior clients, and remote supervision increase risk.

Registration, Forms, and Personnel Controls

Item	Use	Principal-level exam point
Form U4	Registers associated person and discloses required background information	Must be accurate and amended when reportable events occur.
Form U5	Terminates registration and reports termination details	Must be truthful; vague or misleading termination language is a risk.
Form BD	Broker-dealer registration	Material business changes may require updates and supervisory review.
Form BR	Branch office registration	Office status and activities must match actual business.
Continuing education	Regulatory and firm training obligations	Training must address firm business, products, risks, and rule changes.
Statutory disqualification	Certain criminal, regulatory, or disciplinary events can restrict association	Firm cannot ignore disqualifying facts because the person is a high producer.
Permitted activities	Associated persons may only perform activities for which they are properly registered and supervised	Transaction-based compensation to an unregistered person is a classic trap.

Principal Approval and Review Matrix

Activity	Preapproval or review focus	Watch for
New account	CIP, KYC, account type, trusted contact request for retail customer, supervisory acceptance	Incomplete customer profile, suspicious identity, inappropriate account type
Margin account	Margin agreement, risk disclosure, suitability of margin strategy, hypothecation consent	Customer does not understand leverage or maintenance calls
Discretionary account	Written customer authorization and firm acceptance; prompt order review	Time/price discretion for same-day execution is not the same as full discretion
Options account	Options approval level, ODD delivery, customer financial profile, strategy suitability	Uncovered options for inexperienced or undercapitalized customer
Retail communication	Registered principal approval before use unless an exception applies; filing if required	Performance claims, guarantees, unbalanced risk disclosure
Correspondence	Supervision and review under WSPs; risk-based sampling may apply	Complaint hidden in email or text message
Institutional communication	Procedures, training, surveillance; principal approval not always required before use	Content still must be fair, balanced, and not misleading
Outside business activity	Prior written notice; firm evaluation and possible restrictions	Activity creates conflicts, uses firm customers, or resembles securities business
Private securities transaction	Prior written notice; if compensation, firm approval and supervision as firm business	Selling away through LLC, promissory notes, crypto-related private offering
Customer complaint	Capture, investigate, escalate, report if required, retain records	Oral grievance may become reportable if reduced to writing or tied to misconduct
Gift or entertainment	Track limits, business purpose, conflicts, recipient employer rules	“Entertainment” without host present can be treated as a gift
Borrowing/lending with customer	Only if firm permits and an exception applies	Customer consent alone does not make it permissible
Trade correction/cancel	Document reason, approval, customer impact, reporting correction	Pattern of corrections may indicate unauthorized trading or manipulation
Research publication	Analyst independence, conflict disclosures, information barriers	Investment banking influence over rating, target, or timing

Customer Account and Recommendation Rules

KYC, Suitability, and Reg BI

Standard	Applies when	Principal exam focus
FINRA KYC	Every account relationship	Know the customer: essential facts for servicing, authority, legal capacity, and compliance.
FINRA suitability	Recommendations not covered by Regulation Best Interest, including certain institutional contexts	Reasonable-basis, customer-specific, and quantitative suitability.
SEC Regulation Best Interest	Recommendation to a retail customer regarding securities transaction, strategy, or account type	Broker-dealer cannot place its interest ahead of retail customer’s interest.
Form CRS	Retail investor relationship summary	Delivery and consistency with actual services/conflicts.
Institutional suitability	Institutional customer can evaluate risks and independently exercise judgment	Not automatic; firm must have a reasonable basis for believing independence and capability.

Regulation Best Interest Obligations

Reg BI obligation	What it means in scenarios
Disclosure	Disclose capacity, material fees/costs, services, limitations, and conflicts.
Care	Understand risks, rewards, costs, and reasonably available alternatives; avoid excessive series of transactions.
Conflict of interest	Identify, disclose, mitigate, or eliminate conflicts as required. Sales contests based on specific securities over limited periods are high-risk.
Compliance	Maintain policies, procedures, training, and surveillance reasonably designed for Reg BI compliance.

Account Type Decision Points

Scenario	Correct supervisory concern
Retirement rollover recommendation	Treat as an account recommendation; compare costs, services, investment options, conflicts, and investor needs.
Senior investor adds new trusted contact	Trusted contact helps address suspected exploitation or diminished capacity; it does not give trading authority.
Customer grants POA to third party	Verify authority, monitor for abuse, and ensure records reflect authorized agent.
Customer wants aggressive trading in IRA	Customer desire does not override suitability/Reg BI care obligations.
Customer refuses financial information	Firm may limit recommendations or decline account features that require the information.
Customer gives verbal discretion	Not sufficient for discretionary account authority. Obtain required written authorization and approval.
Pattern day trading or active margin use	Confirm disclosures, margin suitability, equity requirements, and risk controls.

AML, Privacy, and Red Flags

Area	Principal must ensure	Exam red flags
AML program	Written program, designated AML officer, training, independent testing, suspicious activity escalation	Structuring deposits, rapid in-and-out wires, third-party checks, secrecy requests
CIP	Collect and verify required identity information before or within permitted account-opening procedures	Customer refuses ID, inconsistent address, shell entity with unclear ownership
Beneficial ownership	Identify and verify control/beneficial owners for legal entity customers as required	Entity layers, nominee owners, offshore secrecy jurisdictions
SAR process	Escalate suspicious activity; avoid tipping off customer	Rep tells customer a SAR may be filed
Sanctions/OFAC controls	Screen customers and transactions under firm procedures	Name match ignored because account is profitable
Privacy/Reg S-P	Safeguard nonpublic personal information; provide notices and opt-out where required	Sending account data to personal email or unauthorized vendor
Cybersecurity	Access controls, incident escalation, vendor oversight	Compromised rep email instructs wire transfer

Communications Quick Reference

FINRA Communication Categories

Category	Definition shortcut	Supervision point
Retail communication	More than 25 retail investors within a 30-calendar-day period	Generally requires registered principal approval before use, unless an exception applies.
Correspondence	25 or fewer retail investors within a 30-calendar-day period	Supervised and reviewed under WSPs; risk-based review often tested.
Institutional communication	Only institutional investors	Procedures, training, and surveillance required; still subject to content standards.

Content Standards

Rule of thumb	Example of compliant approach	Problem answer
Fair and balanced	Benefits and risks appear together and with similar prominence.	Prominent yield claim with hidden risk footnote.
No exaggerated claims	“May provide income, subject to credit and market risk.”	“Safe income with no downside.”
No misleading performance	Include material assumptions, period, fees, and limitations.	Cherry-picked performance period.
No unwarranted projections	Use only permitted illustrations with required basis and disclosures.	Predicting stock price or fund return.
Comparisons must be valid	Compare similar products using disclosed assumptions.	Comparing taxable and tax-exempt yields without tax basis.
Testimonials/endorsements	Must meet applicable disclosure and compensation rules.	Paid influencer post without disclosure.

Digital Communication Traps

Situation	Exam treatment
Static webpage/profile describing services	Usually treated like retail communication; principal approval and records matter.
Interactive social media forum	Supervision, training, surveillance, and recordkeeping still apply.
Rep uses personal texting for business	Business communication must be captured, supervised, and retained if permitted at all.
Hyperlink to third-party content	Firm may adopt or become entangled with content depending on control and context.
Seminar invitation	Review both invitation and script/slides; audience and product claims matter.

Sales Practice and Conduct Controls

Issue	Rule logic	Common trap
Gifts	Business-related gifts are limited and must be tracked.	Splitting gifts through multiple reps or affiliates.
Business entertainment	Must be reasonable, not so frequent or expensive that it creates conflict.	Calling lavish travel “training.”
Non-cash compensation	Product-specific arrangements are restricted and must fit rule conditions.	Sales contest rewards pushing one fund, annuity, or REIT.
Borrowing/lending	Allowed only if firm permits and a rule exception applies.	Customer is “a friend” only because of brokerage relationship.
Sharing in customer account	Requires firm and customer written authorization; sharing generally must be proportionate to contributions.	Rep shares profits but not losses.
Guarantee against loss	Prohibited.	“I’ll make you whole if this drops.”
Churning/excessive trading	Quantitative suitability/Reg BI care issue; review turnover, cost-equity ratio, objectives.	Customer approved every trade but strategy is still excessive.
Unauthorized trading	Serious violation; prompt investigation and complaint handling.	Rep says customer “would have approved.”
Selling away	Private securities transaction outside firm approval/supervision.	Rep sells notes, private fund interests, or startup shares through personal email.
OBA	Prior written notice required; firm evaluates conflicts and customer confusion.	“It is not securities-related” does not end the analysis.

Product Supervision Snapshot

Product/activity	Supervisory focus	High-yield trap
Mutual funds	Share class, breakpoints, rights of accumulation, letters of intent, fund switching	Breakpoint sale: recommending purchases just below breakpoint or ignoring ROA/LOI.
Variable annuities	Long-term horizon, surrender charges, riders, tax deferral, exchange analysis, principal review	Replacing VA mainly for higher commission or unnecessary rider.
Direct participation programs / non-traded REITs	Due diligence, illiquidity, concentration, tax assumptions, distribution source	Treating distributions as guaranteed income.
Structured products	Issuer credit risk, payoff formula, caps, barriers, liquidity, complexity	“Principal protected” depends on issuer and terms.
Options	Approval level, ODD, strategy risk, uncovered exposure, exercise/assignment	Customer approved for covered calls trades naked options.
Penny stocks / low-priced securities	Disclosure, suitability, quote/compensation transparency, manipulation risk	Pump-and-dump red flags ignored.
Fixed income	Credit risk, interest-rate risk, duration, call risk, yield basis, markup/markdown	Reaching for yield without explaining call or credit risk.
ETFs and leveraged/inverse funds	Holding period, compounding, tracking error, volatility	Long-term holding of daily-reset leveraged ETF without analysis.
Private placements	Reasonable investigation, accredited/institutional status if relevant, conflicts, compensation	Relying solely on issuer-provided materials.
Complex products	Training, reasonable-basis suitability, customer-specific review, concentration limits	Product approved for sale but not suitable for customer.

Investment Banking and New Issue Reference

Offering Types

Offering type	Meaning	Principal focus
Firm commitment	Underwriter buys securities from issuer and resells	Underwriter assumes distribution risk; capital and due diligence matter.
Best efforts	Underwriter acts as agent to sell as much as possible	No guarantee issuer receives full proceeds.
All-or-none	Offering cancels unless all securities are sold	Customer funds must be handled consistently with contingency.
Mini-max	Minimum must be sold for offering to proceed; maximum caps size	Track escrow/release conditions and disclosures.
Standby underwriting	Underwriter agrees to purchase unsubscribed shares, often in rights offering	Analyze commitment, compensation, and capital impact.
Private placement	Exempt offering to qualified investors under exemption conditions	Due diligence and selling restrictions remain critical.

Registered Offering Stages

Stage	Permitted/forbidden concept	Exam trap
Pre-filing	Avoid gun-jumping; offers generally restricted before filing	Conditioning the market with promotional material.
Waiting/cooling-off	Indications of interest and preliminary prospectus activity may be allowed; no final sales before effectiveness	Taking customer money as if sale is final.
Effective/post-effective	Sales with required prospectus delivery and confirmations	Omitting final prospectus or material changes.

IPO and New Issue Controls

Topic	Key rule logic
Restricted persons	FINRA new issue rules restrict allocations to broker-dealer personnel and other restricted persons unless an exemption applies.
Account representations	Firm must obtain and maintain required eligibility representations for new issue accounts.
Spinning	Allocating IPO shares to executives/directors to win investment banking business is prohibited.
Quid pro quo allocations	Allocations tied to excessive compensation or future business are prohibited.
Flipping and penalty bids	Must be handled under syndicate rules and disclosed where required.
Laddering	Requiring aftermarket purchases as condition of IPO allocation is prohibited.
Underwriting compensation	Must be fair, reasonable, disclosed, and reviewed under applicable corporate financing rules.

Regulation M, Research, and Information Barriers

Area	Principal-level takeaway	Scenario clue
Regulation M	Distribution participants may be restricted from bidding for or purchasing the offered security during a distribution.	Syndicate desk buys shares to support price without considering Reg M.
Stabilization	Can be permitted if conducted within strict conditions and disclosure rules.	Stabilization is not automatically illegal, but undocumented support is suspect.
Passive market making	May be allowed under conditions for certain Nasdaq distributions.	Market maker continues normal activity without checking distribution status.
Restricted list	Limits trading/recommendations when firm has MNPI or banking role.	Rep solicits stock while firm is advising issuer.
Watch list	Internal monitoring list, more confidential than restricted list.	Broadly sharing watch-list names can leak sensitive information.
Research analyst independence	Banking cannot dictate research content, rating, price target, or timing.	Banker asks analyst to promise favorable coverage.
Research disclosures	Conflicts, ownership, compensation, market making, and banking relationships may require disclosure.	Report omits firm’s underwriting role.
Information barriers	Separate MNPI from trading/sales/research through policies, access controls, and surveillance.	Wall crossing without controls or records.

Trading, Market Making, and Order Handling

Concept	Exam-ready rule
Best execution	Firm must use reasonable diligence to obtain the most favorable terms under the circumstances. Payment for order flow does not excuse poor execution.
Held order	Broker is expected to execute promptly and cannot use broad time/price discretion.
Not-held order	Customer grants discretion over time and price; still requires best execution and documentation.
Market order	Prioritizes execution, not price certainty.
Limit order	Sets price boundary; may miss execution.
Stop order	Becomes market order when triggered; execution price can differ from stop price.
Stop-limit order	Becomes limit order when triggered; execution is not guaranteed.
Customer limit order display	Market makers must display qualifying customer limit orders that improve price or add size unless an exception applies.
Manning/customer order protection	Firm generally cannot trade for its own account ahead of a customer order at a price that would satisfy the customer order.
Reg NMS trade-through	Protected quotations generally cannot be traded through unless an exception applies.
Firm quote	Published quotes create execution obligations subject to rules and exceptions.
Short sale locate	Locate must be obtained before effecting a short sale unless an exception applies.
Order marking	Orders must be marked long, short, or short exempt correctly.
Close-out	Fail-to-deliver positions require close-out under Reg SHO procedures.
Trade reporting	Equity, debt, and order lifecycle reports must be accurate, timely, and corrected when needed.

Manipulation Red Flags

Red flag	Why it matters
Wash trades or matched orders	Creates false appearance of activity.
Marking the close/open	Attempts to influence closing/opening price.
Layering/spoofing	Non-bona fide orders used to move market.
Parking stock	Hiding ownership or control.
Prearranged trades	May evade auction/market rules or create artificial prices.
Rumor spreading	Fraud/manipulation risk, especially around offerings or research.
Pump-and-dump pattern	Promotional activity followed by insider or customer liquidation.
Excessive cancellations	Can indicate spoofing or manipulative order entry.

Trade Reporting, Confirmations, and Records

Record/report	Principal focus
Order ticket/order record	Time, terms, account, capacity, solicited/unsolicited, long/short where relevant.
CAT reporting	Lifecycle order events must be captured accurately.
TRACE	Corporate and agency debt transaction reporting.
Equity trade reports	OTC/exchange reporting facility use must match trade type.
Customer confirmation	Capacity, price, remuneration, settlement, yield/other disclosures where required.
Account statement	Positions, balances, activity; review for errors and red flags.
Corrections/cancels	Must be supported, approved, and not used to hide errors or favor accounts.
Books and records retention	Preserve required records in accessible form; prevent alteration or unauthorized destruction.

Financial Responsibility and Operations

Rule area	What a Series 23 candidate should know
Net capital rule	Broker-dealers must maintain liquid net capital; business expansion, underwriting, proprietary trading, and market making can affect capital.
Haircuts	Securities positions are reduced in value for net capital purposes based on risk.
Aggregate indebtedness/alternative standard	Net capital computations may use different methods depending on firm model. Know concept, not just math.
Customer protection rule	Fully paid and excess margin securities must be protected; customer reserve requirements segregate customer funds.
Possession or control	Firm must safeguard customer securities and resolve deficits.
SIPC	Protects customers if broker-dealer fails, within limits; does not protect against market losses.
Segregation	Customer and firm assets must not be misused or commingled improperly.
FOCUS and financial reporting	Financial condition reporting must be accurate and timely.
Introducing vs clearing firm	Allocation of operational duties must be clear, but introducing firm still supervises its own customer-facing activity.
Carrying agreement	Defines responsibilities between introducing and clearing firms; does not eliminate supervisory duties.

Calculation and Formula Sheet

Use formulas to support supervisory judgment. The exam may test whether a principal recognizes an account problem, unfair charge, margin deficiency, or yield misrepresentation.

Margin Basics

\[ \text{Long account equity} = \text{long market value} - \text{debit balance} \]\[ \text{Short account equity} = \text{credit balance} - \text{short market value} \]\[ \text{Reg T initial requirement for a long stock purchase} = 50\% \times \text{purchase price} \]

Margin concept	Plain-English use
Debit balance	Amount customer borrowed in a long margin account.
Credit balance	Proceeds and required deposit in a short margin account.
LMV	Long market value of securities.
SMV	Short market value of securities sold short.
SMA	Special memorandum account; can create buying power but is not cash.
Restricted account	Equity below initial requirement but above maintenance.
Maintenance call	Equity has fallen below maintenance requirement.
House requirement	Firm may impose stricter requirements than minimum rules.

Markup, Markdown, and Yield

\[ \text{Markup percentage} = \frac{\text{customer price} - \text{prevailing market price}} {\text{prevailing market price}} \times 100 \]\[ \text{Markdown percentage} = \frac{\text{prevailing market price} - \text{customer price}} {\text{prevailing market price}} \times 100 \]\[ \text{Current yield} = \frac{\text{annual income}} {\text{market price}} \]

Concept	Exam reminder
5% policy	A guideline, not a safe harbor. Facts and circumstances control.
Prevailing market price	Reference point for markup/markdown analysis.
Riskless principal	Compensation disclosure and fair pricing still matter.
Current yield	Ignores maturity, call features, and reinvestment risk.
Yield to maturity	Incorporates price, coupon, and maturity.
Yield to call	Important when bond is callable and trading at a premium.

Common Series 23 Scenario Traps

Trap	Better exam answer
“The customer signed a risk disclosure, so the recommendation is fine.”	Disclosure helps but does not replace Reg BI, suitability, or supervision.
“Institutional account means no suitability duty.”	Institutional capability and independent judgment must be assessed.
“The branch is profitable, so inspect less.”	Profitability can increase risk; complaints and activity drive supervisory attention.
“A principal approved the ad after it was used.”	Retail communications generally require approval before use unless an exception applies.
“Rep only sold the private deal to friends.”	If securities-related, analyze private securities transaction and selling away rules.
“Customer allowed discretion verbally.”	Written authorization and firm acceptance are required for discretionary accounts.
“The firm’s quote was only an indication.”	Published firm quotes can create execution obligations.
“Best execution means lowest commission.”	It includes price, speed, likelihood, size, market quality, and overall execution quality.
“Reg BI requires recommending the cheapest product.”	Cost is important, but recommendation must consider full facts and alternatives.
“SIPC makes customer whole.”	SIPC does not insure against investment decline.
“Research can be delayed until banking approves.”	Banking influence over research content/timing is a conflict issue.
“Stabilization is always manipulation.”	Stabilization can be permitted if conducted under applicable conditions and disclosures.
“AML concern is only cash.”	Wires, journals, securities movements, third parties, and account behavior can trigger AML review.
“No customer complaint because it came by email.”	Written electronic grievances can be complaints and records.
“House rules are optional if FINRA minimum is met.”	Firm procedures and house requirements are enforceable supervisory standards.

Final Cram Checklist

Before exam day, be able to answer these quickly:

Who must approve or review the activity?
Is approval required before use, before trade, or through post-use surveillance?
Is the communication retail, correspondence, or institutional?
Is the interaction a recommendation under Reg BI or FINRA suitability?
What customer facts are missing?
Is the customer retail, institutional, accredited, senior, or entity-based?
Is the rep properly registered for the activity?
Is the office correctly classified and inspected?
Does the firm have WSPs that match the activity?
Did an exception report require follow-up?
Is there a conflict of interest, compensation conflict, or sales contest issue?
Is there MNPI or an information-barrier concern?
Does the trade raise best execution, limit order, Manning, or short sale concerns?
Is a trade report, confirmation, or order record inaccurate?
Does the offering involve restricted persons, spinning, Reg M, or underwriting compensation?
Is a private placement being sold with adequate due diligence?
Is a product complex, illiquid, leveraged, callable, or fee-heavy?
Are customer assets protected and properly segregated?
Does AML or sanctions review need escalation?
Was the supervisor’s decision documented?

Practical Next Step

Use this Quick Reference as a checklist while working timed Series 23 practice questions. For every missed item, write the rule trigger, the supervisory action required, and the red flag you failed to recognize.

Scenario Guide

Registration and Personnel