Investment Company and. Variable Contracts Products Principals (Series 26) Practice Exam

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How many days before the effective date must temporary subordinated loan agreements be filed with FINRA?

5 days
10 days
15 days
20 days

The correct answer is: 10 days

Temporary subordinated loan agreements must be filed with FINRA at least 10 days prior to their effective date. The reason for this requirement is to provide FINRA with adequate time to review the terms and structure of the subordinated loan to ensure compliance with regulatory standards and to assess the financial stability of the broker-dealer involved. This window allows for any necessary discussions or clarifications, ensuring that not only are the compliance aspects addressed but also that the capital structure of the firm is sound prior to the commencement of the loan agreement. Therefore, the correct answer reflects a regulatory measure intended to maintain the integrity and stability of financial transactions within broker-dealers.