Series 79 practice questionmediumSupervision Requirements
Under FINRA rules, which of the following best demonstrates proper escalation of a compliance concern?
- AIgnoring the concern if it involves a senior executive
- BNotifying the designated supervisory principal according to the firm’s written supervisory procedures✓ Correct answer
- CReporting directly to the SEC without informing internal compliance
- DDiscussing the issue with colleagues over lunch
Explanation
Why B — Notifying the designated supervisory principal according to the firm’s written supervisory procedures
Proper escalation requires following the firm's supervisory chain as described in its WSPs. The trap is bypassing procedures or informal handling, which can expose the firm to regulatory risk.
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