Exercise
Choose PROPER or IMPROPER
1. _____ Client funds and broker-dealer funds are held in the same account.
2. _____ Client funds are audited by an independent accountant on a scheduled date at least once a year.
3. _____ Clients receive account statements every three months.
4. _____ A broker-dealer receives written consent and then hypothecates a client’s securities.
Answers
1. Improper. Commingling of funds is a violation of custody rules.
2. Improper. Although an annual audit by a third party is required, it must be unannou