Question

All of the following would have to be reviewed by a principal EXCEPT: A Letters recommending securities to all clients of a registered representative B Complaint letters received from customers C Form letters mailed to all customers D Form letters for internal use within a firm

Answer 1

Answer:

D Form letters for internal use within a firm

Explanation:

A principal is a shareholder that has 10% or more of the voting shares of a company that is privately held or publicly traded.

Principals take into consideration SEC rules for insider trading.

The principal studies various activities such as Letters recommending securities to all clients of a registered representative, Complaint letters received from customers, Form letters mailed to all customers.

This is done to ensure he makes informed decisions regarding investment.

Usually other shareholders take a cue from investing activities of the principal.

Form letters for internal use do not determine share performance, so it is not reviewed by a principal.

Principal is different from majority shareholder who has 50% of more of voting shares.