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← Series 79: Section 4
Series 79 practice questionmediumSupervision Requirements

Under FINRA Rule 3110, a broker-dealer must establish a supervisory system including written supervisory procedures. In the context of an investment banking department, which of the following would be the most critical supervisory function?

  1. AEnsuring that all employees take their vacation days consecutively
  2. BReviewing and approving pitch book formatting and graphic design elements
  3. CSupervise deal communications, barriers, and documentation✓ Correct answer
  4. DMonitoring employees' personal social media accounts for non-business content
Explanation

Why C — Supervise deal communications, barriers, and documentation

FINRA Rule 3110 requires firms to establish and maintain a system to supervise the activities of each associated person that is reasonably designed to achieve compliance with applicable securities laws and regulations. In an investment banking context, this includes oversight of deal-related communications, ensuring information barriers are functioning properly, and reviewing transaction documents for compliance with securities regulations. Effective supervision is a cornerstone of a compliant investment banking operation.

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