FINRA Series 99 Practice Test & Mock Exam

Series 99 rewards candidates who can follow the operational workflow, apply the right control early, and handle onboarding, cashiering, custody, settlement, and recordkeeping without creating downstream operational risk. If you are searching for Series 99 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 99 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 50-question Series 99 full-length practice exam before subscribing.

What this Series 99 practice page gives you

• a direct route into the Securities Prep simulator for Series 99
• targeted practice around onboarding, cashiering, custody, settlement, controls, and books-and-records discipline
• detailed explanations that show why the strongest operations response is the most defensible
• a clear free-preview path before you subscribe
• the same subscription across web and mobile

Series 99 exam snapshot

• Provider: FINRA
• Exam: Operations Professional Qualification Exam
• Practice reference: 50 practice questions in 90 minutes
• Registration context: generally paired with the SIE

Topic coverage for Series 99 practice

• Operational workflow: onboarding, cashiering, transfers, and customer-account processing
• Custody and control: margin, stock loan, settlement, confirmations, statements, and books and records
• Controls and escalation: privacy, supervision, control breaks, and the right operational next step

How Series 99 differs from similar routes

How to use the Series 99 simulator efficiently

1. Start with onboarding and records drills so the operations workflow becomes automatic.
2. Review every miss until you can explain the control, process step, and escalation consequence.
3. Move into mixed sets once you can switch between funds movement, custody, and books-and-records scenarios without hesitation.
4. Finish with timed runs so the 90-minute 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 99 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 99

• Series 27 or Series 28 if you are comparing the operations-professional route against the FINOP paths
• Series 14 if the target shifts from operations workflow into compliance-officer control
• Series 24 if you want the broad principal route beside the narrower operations page
• FINRA if you want the wider operations, 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 99 Cheat Sheet
• Series 99 Study Guide

Focused sample questions

Use these focused Series 99 sample-question pages when you want to isolate one official topic area before returning to the mixed simulator.

• Broker-Dealer Operations
• Professional Conduct
• Free Series 99 Full-Length Practice Exam

24 Series 99 sample questions with detailed explanations

These sample questions cover multiple blueprint areas for Series 99. Use them to check your readiness here, then move into the full Securities Prep question bank for broader timed coverage.

Question 1

Topic: Function 1 — Knowledge Associated with the Securities Industry and Broker-Dealer Operations

A customer is enrolled in e-delivery for statements and confirmations.

Exhibit: Firm WSP (excerpt)

Undeliverable event = returned U.S. mail OR e-delivery bounce for a statement/confirmation.
If 2 undeliverable events occur within a rolling 60-day period:
- Switch delivery to paper
- Place a temporary disbursement hold until address is verified
- Open an Address Research ticket within 2 business days of the 2nd event
Assume business days are Mon–Fri and there are no holidays.

Operations records show an e-delivery bounce for a trade confirmation on Monday, October 7, 2024, and an e-delivery bounce for the monthly statement on Thursday, October 24, 2024. Based on the WSP, what is the latest date by which Operations must open the Address Research ticket (and trigger the required handling)?

• A. Monday, October 28, 2024
• B. Monday, November 4, 2024
• C. Tuesday, October 29, 2024
• D. Saturday, October 26, 2024

Best answer: A

Explanation: The firm’s WSP treats bounced e-delivery the same as returned mail for statements/confirmations. Because the second undeliverable event occurred within 60 days of the first, Operations must start the prescribed follow-up. The ticket deadline is calculated as two business days after the second event date.

Question 2

Topic: Function 1 — Knowledge Associated with the Securities Industry and Broker-Dealer Operations

During end-of-day confirmation review, an operations analyst sees a corporate bond trade that was executed as principal. The confirmation shows a net price and lists “Commission: $0.00,” but the “Markup/Markdown” field is blank even though the trading system shows the customer price included a dealer markup. Confirmations are scheduled for electronic delivery in 30 minutes.

What is the best next step?

• A. Hold delivery and issue a corrected confirmation showing the markup/markdown disclosure
• B. Release the confirmation since the net price already reflects the markup
• C. Change the confirmation to show the markup as a commission
• D. Release the confirmation and disclose the markup on the next monthly statement

Best answer: A

Explanation: Trade confirmations must clearly display transaction-related charges in the appropriate fields. For principal bond trades, the customer’s charge is typically disclosed as a markup/markdown (not an agency commission). If the markup/markdown disclosure is missing, operations should stop delivery and generate a corrected confirmation rather than relying on later statements.

Question 3

Topic: Function 2 — Professional Conduct and Ethical Considerations

A broker-dealer is switching from paper mailings to electronic delivery for its annual customer privacy notice (Regulation S-P). The operations team is asked to implement a control that both supports valid electronic delivery and provides evidence that the disclosure was delivered.

Which option best matches that control?

• A. Retain e-delivery consent and delivery logs for each notice
• B. Rely on trade confirmations to evidence the privacy notice delivery
• C. Use OFAC screening results as proof the notice was delivered
• D. Require a medallion signature guarantee on the notice acknowledgment

Best answer: A

Explanation: For privacy notices, firms must be able to show the disclosure was delivered using an appropriate method. When using electronic delivery, the operational control should include proof the customer agreed to receive disclosures electronically and an auditable record that the notice was sent or made available as required. Retaining e-consent records plus delivery logs best meets both needs.

Question 4

Topic: Function 1 — Knowledge Associated with the Securities Industry and Broker-Dealer Operations

A retail customer places an order to buy 100 corporate bonds. The firm immediately buys the bonds from another dealer and then sells the same bonds to the customer, earning compensation through the price (no separate commission is charged).

Which statement about the firm’s trading capacity, reporting, or customer disclosure is INCORRECT?

• A. The trade should be reported using a riskless principal capacity when applicable
• B. Because the firm took no market risk, the customer confirmation should disclose an agency trade
• C. The customer confirmation should reflect the firm’s compensation as a markup/markdown (not a commission)
• D. The customer confirmation should disclose the firm acted as principal

Best answer: B

Explanation: This is a riskless principal transaction: the firm offsets a dealer purchase with a customer sale while earning compensation in the price. Riskless principal is a form of principal capacity, so disclosures and many operational records (including confirmations) must not characterize it as agency. Agency treatment generally applies when the firm acts as agent and charges a commission.

Question 5

Topic: Function 1 — Knowledge Associated with the Securities Industry and Broker-Dealer Operations

In a fully disclosed clearing arrangement, which function is typically performed by the carrying (clearing) broker-dealer?

• A. Opens customer accounts and obtains required account documentation
• B. Supervises registered representatives for sales-practice compliance
• C. Solicits customer orders and provides ongoing customer service
• D. Safeguards customer funds and securities and issues statements and confirmations

Best answer: D

Explanation: In a fully disclosed relationship, the introducing firm interfaces with the customer, while the carrying firm performs back-office clearing and custody functions. Because it holds customer assets and maintains the core books/records for clearing, the carrying firm is the one that typically generates customer statements and trade confirmations.

Question 6

Topic: Function 1 — Knowledge Associated with the Securities Industry and Broker-Dealer Operations

A carrying broker-dealer maintains customer physical securities in a locked vault. An operations associate receives an approved internal ticket to deliver a customer’s stock certificate from the vault to an overnight courier for transfer agent processing. The associate is entitled for vault access and is at the vault door with the ticket.

What is the best next step to follow the control sequence used to secure customer assets?

• A. Retrieve the certificate under dual control and record the removal in the vault access/chain-of-custody log
• B. Release the certificate once the ticket is approved since vault access is entitlement-controlled
• C. Scan the certificate to the work item and then hand it to the courier
• D. Retrieve the certificate now and update the vault log after the courier pickup

Best answer: A

Explanation: When customer assets are physically accessed or removed from safekeeping, the firm should use preventative and detective controls that protect against misappropriation and document custody. Dual control requires two authorized individuals for the retrieval/release step, and a vault access (chain-of-custody) log provides an audit trail showing who handled the asset and when.

Question 7

Topic: Function 1 — Knowledge Associated with the Securities Industry and Broker-Dealer Operations

A broker-dealer’s cashiering team receives a customer check to fund an existing individual brokerage account. The check is payable to the order of Michael Lee for $7,500, is currently dated, and is signed by the drawer.

Exhibit: Back of check (endorsement area)

Pay to the order of Sarah Lee
Michael Lee

Which statement about processing this check is INCORRECT?

• A. Reject unless Sarah Lee also endorses the check
• B. A “for deposit only” endorsement restricts further negotiation
• C. Accept for deposit because the original payee signed it
• D. A signature-only endorsement can create bearer paper risk

Best answer: C

Explanation: The endorsement shown is a special endorsement to a new payee (Sarah Lee). Once a check is specially endorsed, it generally cannot be negotiated or deposited without the named endorsee’s endorsement. Because Sarah did not endorse the item, it should not be accepted for deposit to Michael’s account based solely on Michael’s signature.

Question 8

Topic: Function 1 — Knowledge Associated with the Securities Industry and Broker-Dealer Operations

A branch operations associate receives an unsolicited envelope addressed to the firm that contains a customer’s physical stock certificate and a signed note stating, “Please hold this certificate in safekeeping; no sale instructions.” The certificate has not yet been entered into any tracking log.

As the carrying firm, what is the best next step to help meet customer protection custody and control expectations?

• A. Use it to cover a delivery, then replace it later
• B. Log receipt and place it in a segregated customer control location
• C. Book it to firm inventory to streamline reconciliation
• D. Store it in the branch safe until the customer calls

Best answer: B

Explanation: The firm should immediately establish control by documenting receipt and moving the certificate to a designated customer custody location. Safekeeping is the service of holding a customer asset, while segregation is the control of keeping customer securities separate from firm assets and readily retrievable. This supports the firm’s customer protection obligations to maintain custody and control over customer securities.

Question 9

Topic: Function 1 — Knowledge Associated with the Securities Industry and Broker-Dealer Operations

On T+1, a clearing firm’s DTC delivery of 10,000 shares of XYZ to the contra broker shows as “completed” in the morning. Midday, DTC updates the item to “reclaimed,” reversing the securities and money movement. The introducing firm’s customer is expecting sale proceeds to be available today.

What is the best next step?

• A. Wait until end of day to see if DTC automatically re-posts the delivery before taking any action
• B. Issue an immediate buy-in notice to the contra broker for failing to accept delivery
• C. Release the proceeds to the customer since the delivery originally showed “completed”
• D. Treat it as a settlement fail, research the reclaim reason with the contra/DTC, and re-deliver once corrected while notifying client service of a proceeds delay

Best answer: D

Explanation: A reclamation (reclaim) is a reversal of a prior settlement movement, which turns an apparent completed settlement into a fail. The operational control is to identify why the counterparty reclaimed/rejected and promptly correct and reprocess the delivery. Because the settlement has been reversed, customer proceeds generally cannot be treated as finally available until the trade is successfully re-settled.

Question 10

Topic: Function 1 — Knowledge Associated with the Securities Industry and Broker-Dealer Operations

A broker-dealer’s operations team is supporting the quarterly best execution review after surveillance flagged several equity orders that were trade-reported late and then corrected with “as/of” reports. The Best Execution Committee asks operations to provide records that evidence whether the executions were reasonably priced versus the market at the time the orders were handled.

What is the best next step?

• A. Rely on customer confirms and monthly statements to evidence execution quality
• B. Pull order-event and routing/execution data with timestamps and venue, and pair it to NBBO quote data
• C. Document the late-report exceptions and close the alert without market comparison
• D. Submit additional “as/of” trade reports to align the tape to internal timestamps

Best answer: B

Explanation: To evidence best execution monitoring, operations must be able to show how orders were handled (receipt, routing, execution, and any re-routes) and compare those events to contemporaneous market conditions. The most direct operational next step is to gather time-sequenced order and execution/routing records and match them to NBBO quote data for execution-quality analysis and documentation.

Question 11

Topic: Function 2 — Professional Conduct and Ethical Considerations

A clearing broker-dealer is updating its business continuity plan (BCP). The firm wants a control that ensures critical operations can continue if the primary site becomes unavailable.

Which BCP component best matches this purpose?

• A. Customer-specific investment policy statements
• B. Annual anti-money laundering independent test plan
• C. Documented backup site and systems recovery procedures
• D. Trade error account funding and allocation procedures

Best answer: C

Explanation: A BCP’s purpose is to maintain or quickly resume critical business functions during disruptions. A documented alternate processing capability (backup site) and recovery procedures are core BCP components because they address loss of facilities and technology needed to operate.

Question 12

Topic: Function 1 — Knowledge Associated with the Securities Industry and Broker-Dealer Operations

An operations associate is asked to process a customer’s bank-instruction change and same-day wire. The registered representative says the customer “confirmed everything” via the rep’s personal Gmail and text messages because the customer was traveling, and forwards screenshots of the texts as support. The firm’s WSPs require that customer instructions be received and maintained through firm-approved, archived communication channels.

Which is the primary operational risk/red flag in this scenario?

• A. The firm has a Regulation S-P violation solely because screenshots were forwarded internally
• B. The wire is likely to fail settlement because of incorrect SSIs
• C. The firm has a CIP deficiency because the customer is traveling
• D. Firm business communications are occurring off-channel and may not be retained or supervised

Best answer: D

Explanation: Customer instructions and related discussions are firm business communications that must be captured and retained in accordance with the firm’s recordkeeping program. Using a rep’s personal Gmail and text messages creates a supervision and retention gap because the firm may not be able to preserve, retrieve, and surveil those messages. The key control is to require use of approved, archived channels (or an approved capture solution) before acting on the request.

Question 13

Topic: Function 1 — Knowledge Associated with the Securities Industry and Broker-Dealer Operations

Which statement correctly describes account ownership and setup for a SEP IRA?

• A. Only employees of large employers are eligible to participate.
• B. The employer establishes the plan, but each employee owns an IRA in their own name.
• C. Employees make salary-deferral contributions through payroll deductions.
• D. The employer owns one pooled account and allocates units to employees.

Best answer: B

Explanation: A SEP IRA is set up by an employer, but the actual retirement accounts are individual IRAs titled to each participating employee. Operationally, that means the account owner is the employee (not the employer), even though contributions are generally made by the employer under the SEP arrangement.

Question 14

Topic: Function 1 — Knowledge Associated with the Securities Industry and Broker-Dealer Operations

An operations associate receives the following service ticket.

Exhibit: Transfer request (snippet)

Security: XYZ Corp Common   CUSIP: 123456789
Qty: 200
Request Type: DWAC DEPOSIT
Certificate #: A017392
Transfer Agent (FAST): Computershare (Yes)
Credit To: DTC Participant 0456
Registration on cert: Jane R Doe

Which interpretation is best supported by the exhibit?

• A. Move shares from DTC to the transfer agent into DRS book-entry for the customer
• B. Initiate an ACATS transfer of the customer’s full account to another firm
• C. Deposit the physical certificate into the brokerage account via DWAC
• D. Ship the certificate to DTC for vault deposit and DTC re-registration

Best answer: C

Explanation: The exhibit shows a certificated position with a request type of DWAC deposit and instructions to credit the firm’s DTC participant number at a FAST-eligible transfer agent. That combination indicates an electronic deposit/credit through the DTC–transfer agent interface rather than a DRS profile movement to customer-held book-entry at the transfer agent.

Question 15

Topic: Function 2 — Professional Conduct and Ethical Considerations

An operations associate reviewing an order audit trail notices a proprietary trader repeatedly entering large buy orders away from the market, quickly canceling them when the inside market moves, and then receiving small executions on the opposite side on another venue (a pattern consistent with layering/spoofing). The firm’s WSPs require immediate escalation of suspected market abuse and prohibit “tipping off” any involved party.

Which action by the operations associate is NOT appropriate under these facts?

• A. Preserve and lock down relevant order, trade, and communication records
• B. Escalate the activity to Market Abuse Surveillance/Compliance with order details
• C. Message the trader to stop because surveillance may be reviewing the activity
• D. Notify an operations supervisor and follow WSPs for any temporary access restrictions

Best answer: C

Explanation: The observed enter-and-cancel pattern with opposite-side executions is a market-abuse red flag that should be escalated through the firm’s established channels. Operations should support review by preserving records and involving supervisors/Compliance as required. Directly warning the trader is inappropriate because it risks tipping off and interfering with surveillance or regulatory review.

Question 16

Topic: Function 1 — Knowledge Associated with the Securities Industry and Broker-Dealer Operations

Which statement best differentiates a broker-dealer’s proprietary positions from customer positions, and why the distinction matters for regulatory computations and reporting?

• A. Proprietary are customer holdings; customer are firm inventory for trading
• B. Both are treated the same; separation only impacts customer statements
• C. The distinction exists mainly to determine trade reporting venues and tapes
• D. Proprietary are firm positions for net capital; customer drive reserve/segregation

Best answer: D

Explanation: Proprietary positions are the firm’s own securities and related exposures that feed directly into net capital computations. Customer positions and related credits/debits are treated as customer property for purposes of customer protection, including reserve formula and segregation/custody reporting. Keeping them separate prevents customer assets from being used to finance the firm.

Question 17

Topic: Function 2 — Professional Conduct and Ethical Considerations

An operations analyst confirms on September 9, 2025 that an external party had unauthorized access to certain customers’ nonpublic personal information (NPI). On September 10, 2025, the firm receives a written request from law enforcement stating: “Do not notify affected customers until September 23, 2025.”

Exhibit: WSP excerpt (Privacy incident notices)

• Notify affected customers in writing within 10 calendar days of determination.
• If a written law-enforcement delay is received, delay notice until the date specified; send the notice the next business day after the delay expires.
• Email may be used only if it does not include full account numbers, SSNs, or login credentials (mask account numbers to last 4 digits).

Assume business days are Monday–Friday and there are no holidays. Which customer communication meets the WSP timing and content requirements?

• A. Email the notice on September 23, 2025, showing only the last four digits of the account number
• B. Email the notice on September 24, 2025, showing only the last four digits of the account number
• C. Email the notice on September 19, 2025, showing only the last four digits of the account number
• D. Email the notice on September 24, 2025, including the customer’s full account number for identification

Best answer: B

Explanation: A written law-enforcement delay overrides the normal 10-calendar-day notification timing. The WSP requires sending the notice on the next business day after the specified delay date and prohibits including full account numbers, SSNs, or credentials in an email notice. The communication that follows the delay timing and uses masked account information is the only compliant choice.

Question 18

Topic: Function 1 — Knowledge Associated with the Securities Industry and Broker-Dealer Operations

An equity trading desk asks Operations to submit an “as-of” correction to change the execution time on a proprietary trade from 10:01:12 to 10:04:30, stating it was “entered wrong.” The same trader handled a large customer buy order in the same symbol at 10:02:05, and the proprietary trade was profitable.

Which is the primary operational red flag/control concern?

• A. Potential front running/manipulation through time-stamp alteration
• B. Reg SHO close-out risk from improper short sale marking
• C. Increased settlement fail risk because the trade will no longer compare
• D. Late trade reporting exposure due to exceeding reporting time frames

Best answer: A

Explanation: A request to alter an execution time on a profitable proprietary trade that brackets a customer order is a classic red flag for front running or other manipulative conduct. Operations’ key control concern is the integrity of trade reporting and books and records, requiring escalation and supervisory review rather than routine processing of the correction.

Question 19

Topic: Function 1 — Knowledge Associated with the Securities Industry and Broker-Dealer Operations

An operations analyst is reviewing a fully disclosed introducing arrangement.

Exhibit: Clearing agreement summary (excerpt)

Arrangement: Fully disclosed introducing broker

Carrying firm responsibilities:
- Maintains custody/control of customer securities and cash
- Prepares and sends trade confirmations and account statements
- Maintains the customer account records on the carrying firm's books

Introducing firm responsibilities:
- Opens/approves new accounts and maintains customer documentation
- Performs CIP and handles AML-related customer follow-up
- Accepts customer orders and handles customer complaints

Based on the exhibit, which responsibility is assigned to the carrying firm under this arrangement?

• A. Performing CIP and AML-related customer follow-up
• B. Opening and approving new accounts
• C. Accepting customer orders and handling complaints
• D. Preparing and sending trade confirmations and account statements

Best answer: D

Explanation: Carrying agreements allocate operational responsibilities between the introducing and carrying firms. The exhibit specifically states that the carrying firm prepares and sends both trade confirmations and account statements in this fully disclosed arrangement. That is the only choice directly supported by the record excerpt.

Question 20

Topic: Function 1 — Knowledge Associated with the Securities Industry and Broker-Dealer Operations

A carrying broker-dealer’s trading system posts trade-date activity to a securities sub-ledger, the cashiering platform posts same-day wires, and the clearing system provides a daily CNS settlement file that feeds the general ledger (GL) used for the daily net capital computation. On June 3, 2025, a customer buys 1,000 shares of XYZ at $20.00 (regular-way T+1), and the customer wires $20,050 the same day.

Which statement about how these activities should flow into the GL is INCORRECT?

• A. Book the purchase on trade date with a clearing payable.
• B. Wait to record the trade in GL until settlement occurs.
• C. Post the wire to firm cash and the customer’s cash ledger.
• D. At settlement, clear the payable and reflect cash/securities movement.

Best answer: B

Explanation: In broker-dealer accounting, trading, cashiering, and settlement activity typically flows from operational sub-ledgers into the GL on a timely basis, including trade-date recognition of purchases and sales. Settlement processing then clears trade-date receivables/payables and records any fails or differences. Delaying trade recognition until settlement would misstate the firm’s books and downstream financial computations.

Question 21

Topic: Function 2 — Professional Conduct and Ethical Considerations

A broker-dealer’s Operations group uses an ad hoc shared mailbox to handle potential fraud escalations (e.g., client address change followed by a same-day wire request). During an internal review, Compliance finds multiple email threads marked “resolved” with no case ID, no documented investigation steps, no corrective action recorded, and no periodic review of similar events across accounts.

Which is the primary risk/control concern with this escalation process?

• A. The firm will be unable to calculate daily net capital accurately
• B. The firm may fail to deliver prospectuses on required transactions
• C. The firm cannot evidence resolution, implement corrective actions, or identify trends across escalations
• D. The firm increases the risk of trade comparison breaks at NSCC

Best answer: C

Explanation: Escalations must be tracked end-to-end with a unique identifier, documented investigation and disposition, and a clear close-out that captures corrective actions. Without that structure, the firm cannot demonstrate that potential red flags were properly resolved. It also prevents effective trend analysis to detect repeat patterns and strengthen controls.

Question 22

Topic: Function 2 — Professional Conduct and Ethical Considerations

A customer reports an unauthorized ACH withdrawal and asks for an update. While the firm’s fraud team investigates, an operations associate drafts an email stating: “We believe your ex-spouse initiated the withdrawal from IP address ___; we have filed a SAR; and we are coordinating with the other bank to reverse it.”

What is the primary risk/control concern with sending this message to the customer?

• A. Improper disclosure that could tip off a subject and expose nonpublic details
• B. Trade reporting exposure from a late correction
• C. Margin deficiency created by the ACH debit
• D. Increased settlement fail risk due to mismatched SSIs

Best answer: A

Explanation: The key issue is how the firm communicates with a customer while a fraud/AML investigation is underway. Communications should provide a high-level status and next steps, but must not reveal SAR filing, suspected individuals, or sensitive investigative specifics that could compromise the investigation or disclose nonpublic information.

Question 23

Topic: Function 2 — Professional Conduct and Ethical Considerations

A broker-dealer’s accounts payable team receives two payment requests from LeadPro LLC, a marketing vendor that is not registered with FINRA and has no CRD number.

• Invoice A: $5,000 flat monthly fee for “digital advertising and call-center outreach,” with an itemized activity log.
• Invoice B: “Referral fee = 20% of commissions earned from accounts sourced by LeadPro,” payable monthly.

To comply with the prohibition on paying commissions (transaction-based compensation) to unregistered persons, which invoice attribute is the decisive red flag that should trigger rejection/escalation under operational controls?

• A. Payment will be made by ACH to a business account
• B. The invoice includes an itemized services log
• C. Payment is a percentage of commissions generated
• D. The vendor furnished an IRS Form W-9

Best answer: C

Explanation: Operations controls should stop payments that are transaction-based compensation to someone who is not properly registered. A fee calculated as a percentage of commissions is directly tied to securities transactions and is treated like a commission/referral arrangement, which must be rejected or escalated for compliance review before any payment is made.

Question 24

Topic: Function 2 — Professional Conduct and Ethical Considerations

Your firm is assembling the annual FINRA Rule 3130 certification package. An operations supervisor is asked what their unit must provide as supporting documentation.

Exhibit: WSP excerpt (Rule 3130 annual certification support)

Rule 3130 Annual Certification (CEO sign-off)
Supporting documentation to be compiled by Compliance includes:
- Rule 3120 Supervisory Control Testing Report (current year)
- Customer complaint summary and resolution status
- Aged fails (FTD/RTD) report and buy-in/close-out activity summary
- Books-and-records exception log (late/failed captures and corrections)
- Net capital / reserve computation exception log (FINOP)
Retention: Store certification memo and support in WORM repository

Based on the exhibit, which item is an operational input that the clearing/settlement unit should provide to support the Rule 3130 annual certification?

• A. CIP documentation for every active customer account
• B. Annual SIPC assessment invoice and payment confirmation
• C. Daily consolidated order blotter for all equity trades
• D. Aged fails report and buy-in/close-out activity summary

Best answer: D

Explanation: Rule 3130 is an annual senior-executive certification supported by evidence that the firm has processes to establish, maintain, review, test, and modify compliance policies and supervisory controls. The exhibit identifies specific operational reports that help evidence those controls. Clearing/settlement support is shown through exception-style outputs tied to settlement risk, like aged fails and related close-out activity.

Series 99 operations professional map

Use this map after the sample questions to connect individual items to customer accounts, settlement, clearance, books and records, custody, corporate actions, and operational controls these Securities Prep samples test.

    flowchart LR
	  S1["Operational process or exception"] --> S2
	  S2["Identify account settlement or custody impact"] --> S3
	  S3["Check records reconciliation and control evidence"] --> S4
	  S4["Apply escalation correction and customer-protection step"] --> S5
	  S5["Document resolution and communication"] --> S6
	  S6["Monitor recurring breaks and process risk"]

Quick Cheat Sheet

Mini Glossary

• Operations: Back-office processing, books and records, settlement, custody, and control functions.
• Order handling: Process for receiving, routing, executing, modifying, and documenting orders.
• Supervision: Firm process for review, approval, escalation, and evidence of compliance.
• AML: Anti-money laundering controls for identifying, monitoring, and reporting suspicious activity.
• Communications: Retail and institutional content subject to approval, recordkeeping, and fair-balanced standards.

In this section

• Series 99: Broker-Dealer Operations
  Try 10 focused Series 99 questions on Broker-Dealer Operations, with explanations, then continue with the full Securities Prep practice test.
• Series 99: Professional Conduct
  Try 10 focused Series 99 questions on Professional Conduct, with explanations, then continue with the full Securities Prep practice test.
• Free Series 99 Full-Length Practice Exam: 50 Questions
  Try 50 free Series 99 practice questions across the official topic areas, with answers and explanations, then continue with the full Securities Prep question bank.