SIE Exam Question 994: Answer and Explanation

Question: 994

All but which of the following are correct regarding FINRA's emergency preparedness rule?

• A. A firm must disclose to its customers how its business continuity plan addresses the possibility of a significant business disruption and how the firm plans to respond to events of varying scope.
• B. A firm's business continuity plan must be made available promptly to FINRA staff if requested.
• C. A firm's business continuity plan must be reasonably designed so the firm can meet its existing obligations to customers.
• D. A firm's business continuity plan may be kept confidential from clients.

Correct Answer: D

Explanation:

According to FINRA's emergency preparedness rule, a firm must disclose to its customers how its business continuity plan addresses the possibility of a significant business disruption and how the firm plans to respond to events of varying scope. A firm's business continuity plan must be made available promptly to FINRA staff if requested, and it must be reasonably designed so the firm can meet its existing obligations to customers. The plan must be made in writing to customers when they open their account, posted on the firm's website if they maintain one, and mailed to customers upon request.