FINRA Series 9

Cards · 20

Options Account Approval (Rule 2360)

A new client seeks to trade index calls; the branch manager must review their net worth and experience, then formally approve the account in writing prior to accepting orders.

Delivery of Options Disclosure Document (ODD)

A customer opens an options account; the supervisor ensures the ODD is furnished at or before the time the account receives options trading approval.

Options Agreement Return (15-Day Rule)

A client approved for options fails to return the signed agreement within 15 calendar days; the manager must restrict the account to closing transactions only.

Supervision of Discretionary Options Accounts

A registered rep plans discretionary options trading for an elderly client; the Series 9 supervisor must grant written prior approval and review all trades frequently.

Approval of Uncovered Options Writing

A client applies to write uncovered put options; the supervisor must verify the client meets specific high net-worth and experience criteria established in firm WSPs.

Options Communications Approval (Retail)

A rep drafts a seminar flyer explaining put-writing strategies; a Registered Options Principal must pre-approve the retail communication before public distribution.

Options Correspondence Review

A rep emails an existing client regarding a protective collar strategy; the Series 9 supervisor reviews the email post-use according to written supervisory procedures.

Handling Customer Options Complaints

A customer alleges an unauthorized spread trade; the supervisor must record the complaint in a centralized options complaint file and initiate an investigation.

Position Limits Monitoring

A hedge fund client accumulates 24,000 contracts on the same side of the market; the supervisor checks OCC/exchange position limits to avoid regulatory breaches.

Exercise Limits Enforcement

A client seeks to exercise 30,000 contracts over 5 consecutive business days; the supervisor verifies the action does not exceed aggregate exercise limit ceilings.

Option Order Ticket Review (Prompt Review)

A rep enters an equity straddle order; the supervisor must review and initial or electronically approve the order ticket promptly by the end of the trading day.

Unregistered Employee Role Restrictions

An unlicensed assistant describes the mechanics of a butterfly spread to a caller; the manager intervenes, noting non-registered staff cannot discuss options strategies.

Verification of Customer Background and Financial Info

A client updates their income to qualify for Tier 3 options; the supervisor must send a copy of the revised profile to the client within 30 days for confirmation.

Supervision of Employee Accounts (Rule 3210)

An associated person wishes to trade options at another broker-dealer; the supervisor must provide prior written consent and request duplicate trade confirms.

Exercise Cut-Off Time Compliance

A client instructs an exercise of expiring calls at 5:45 PM ET on expiration Friday; the manager rejects the request because the OCC exercise cutoff is 5:30 PM ET.

Automatic Exercise Thresholds (Ex-by-Ex)

An in-the-money call is $0.02 above the strike at expiration; the supervisor notes OCC will automatically exercise it unless the client submits contrary instructions.

Suitability of Complex Options Strategies

A conservative retiree is recommended a complex iron condor; the supervisor rejects the trade due to lack of alignment with stated risk tolerance and objectives.

Supervision of Branch Offices (Annual Inspection)

The Series 9 supervisor performs a periodic inspection of a remote branch to audit options trade blotters, customer files, and correspondence logs.

Reporting Substantial Options Positions (Large Option Positions)

An institution establishes an aggregate position exceeding 200 contracts on a single underlying; the compliance principal must report this position to FINRA.

Material Changes in Account Financial Status

A customer who writes uncovered calls suffers a massive bankruptcy event; the supervisor re-evaluates suitability and restricts trading to mitigate default risk.