What do FINRA conduct rules govern?

What do FINRA conduct rules govern?

• A. Ethical standards in underwriting
• B. Conduct in discretionary accounts
• C. Marketing strategies for securities
• D. Investment advisory compliance

Answer: (B)

FINRA conduct rules primarily focus on the behavior and professionalism of members and their associated persons in relation to customers, other members, and the market. These rules are designed to protect investors and ensure a fair and efficient market. The option regarding conduct in discretionary accounts is particularly relevant, as FINRA set forth provisions that ensure those handling such accounts act in the best interest of the client. Discretionary accounts allow brokers to make trades on behalf of clients, so the conduct rules emphasize transparent communication, fiduciary responsibility, and adherence to the client's investment objectives. This regulation helps prevent misuse of discretion and safeguards investor interests. While ethical standards in underwriting and compliance aspects in investment advisory firms are important aspects of the finance industry, they fall under different regulatory frameworks or specific areas that are not primarily governed by FINRA's conduct rules. Marketing strategies can be influenced by various regulatory bodies but do not specifically align with the direct conduct expectations set by FINRA.

FINRA conduct rules primarily focus on the behavior and professionalism of members and their associated persons in relation to customers, other members, and the market. These rules are designed to protect investors and ensure a fair and efficient market.

The option regarding conduct in discretionary accounts is particularly relevant, as FINRA set forth provisions that ensure those handling such accounts act in the best interest of the client. Discretionary accounts allow brokers to make trades on behalf of clients, so the conduct rules emphasize transparent communication, fiduciary responsibility, and adherence to the client's investment objectives. This regulation helps prevent misuse of discretion and safeguards investor interests.

While ethical standards in underwriting and compliance aspects in investment advisory firms are important aspects of the finance industry, they fall under different regulatory frameworks or specific areas that are not primarily governed by FINRA's conduct rules. Marketing strategies can be influenced by various regulatory bodies but do not specifically align with the direct conduct expectations set by FINRA.