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

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To avoid the taping rule after receiving notice from FINRA, within what timeframe must a firm adjust its staffing levels or seek an exemption?

15 days
30 days
45 days
60 days

The correct answer is: 30 days

The correct answer is based on regulatory guidance concerning the taping rule, which is a requirement that certain broker-dealers must tape record their conversations to comply with FINRA regulations. When a firm receives a notice from FINRA regarding the taping rule, it is generally required to take action to either adjust its staffing levels or seek an exemption within a specified timeframe. In this context, firms have a 30-day period to make these adjustments or address the issue through other means. This timeframe is crucial because it allows the firm to promptly respond to regulatory requirements and maintain compliance without significant disruptions to their operations. By adhering to this 30-day timeframe, firms demonstrate their commitment to following industry regulations and protecting the interests of their clients.