General Securities Sales Supervisor (Series10) Practice Exam

What is the responsibility of a municipal principal under MSRB Rule G-27?

1. To approve order tickets immediately

2. To review customer accounts monthly

3. To assess the compliance of investment strategies

4. To monitor order tickets promptly and customer accounts frequently

The correct answer is: To review customer accounts monthly

The role of a municipal principal under MSRB Rule G-27 encompasses the oversight of various compliance and procedural aspects for municipal securities. Among these responsibilities, the principal is tasked with monitoring and reviewing the activities related to customer accounts in a way that ensures adherence to regulatory standards and the integrity of the securities business. While reviewing customer accounts monthly can certainly play a part in a broader compliance strategy, it is critical to understand that the municipal principal has a more extensive responsibility that involves regular oversight of a firm's practices, including order tickets and compliance with applicable rules and regulations. Monitoring order tickets and customer accounts frequently is essential for ensuring that transactions are handled appropriately and that customer interests are protected. In summary, the principal's responsibilities are aimed at ensuring that a firm operates in compliance with MSRB rules and that customer accounts are managed with due diligence and care, leading to a robust oversight framework that aligns with regulatory expectations.