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

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When seeking approval for subordination using standard FINRA forms, how many business days in advance should the draft forms be submitted?

5 business days
10 business days
15 business days
20 business days

The correct answer is: 10 business days

The requirement to submit draft forms for subordination at least ten business days in advance aligns with FINRA's rules and timelines. This submission period is established to provide sufficient time for regulators to review the proposed subordination and ensure compliance with regulatory requirements. The review process involves assessing the firm's financial position and the implications of the proposed subordination on both the firm and its customers. Submitting forms well in advance allows for any necessary adjustments or changes before the requested effective date. It is important for firms to adhere to this timeframe to avoid delays in approval, which could impact their operations. Being structured with this advance notice helps maintain a robust regulatory environment and protects investor interests, ensuring transparency and accountability in financial practices.