For its first year of FINRA membership, a new broker-dealer must file retail communications with FINRA:

At least 10 business days before first use

Within 10 business days after first use

Only when FINRA requests them in a spot-check

Which is generally PROHIBITED in a broker-dealer retail communication?

Predicting or projecting investment performance for a specific security

Presenting historical performance with required disclosures

Describing the firm's services, fees and office locations in plain terms

Stating that FINRA membership exists

A firm's advertisement says 'FINRA-approved investment strategies.' Why is this impermissible?

It implies FINRA endorses the firm or its products

FINRA must be referred to as the NASD

Only the SEC may be mentioned in advertising

Firms may name FINRA only in correspondence, never in retail ads

Under FINRA's telemarketing rule, a rep may cold-call a prospect only between:

8 a.m. and 9 p.m. local time at the called person's location

8 a.m. and 9 p.m. local time at the calling rep's office location

9 a.m. and 5 p.m. local time of the caller

Which telemarketing call is permitted even though the number is on the national do-not-call registry?

A call to someone with an established business relationship

A call to a person who was a customer 5 years ago with no recent activity

A call to any person over age 65

A call made by a registered principal

An issuer's registration statement is declared effective. Which statement about the SEC's role is TRUE?

The SEC has not approved or disapproved the securities

The SEC has approved the merits of the offering

The SEC has guaranteed the accuracy of the prospectus

The SEC has confirmed the offering price is fair to investors

Under Regulation D Rule 506(c), a broker-dealer may use general solicitation, provided that:

All purchasers are accredited and their status is verified

No more than 35 non-accredited purchasers buy in the offering

The offering is under $5 million

The offering is sold only within one state

Which natural person qualifies as an accredited investor under Regulation D?

A person holding a Series 65 license in good standing

A person with $900,000 net worth including a $400,000 home

A person with $150,000 income in each of the last two years

A person who inherited $500,000 last year

A retail communication compares two investment products. Under FINRA rules, it must:

Disclose all material differences, such as costs, risks and tax features

Only mention the firm's own product

Be filed with the SEC and approved before it is sent to any retail investor

Series 7: F1: Seeks Business for the Broker-Dealer

Function 1 is 7% of the Series 7 (9 questions): communications with the public, research, the new-issue process and exempt offerings..

Updated 2026-09-23 · 2 sources · By the SeriesPrepKit team

Exam weight

Scored questions

Exam

Series 7

Outline

FINRA 2025

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Where it sits in the outline

Official outline section: F1: Seeks Business for the Broker-Dealer, 7% of the Series 7 (9 of 125 scored questions), per FINRA - Series 7 Content Outline (2025).

Function 1 is 7% of the Series 7 (9 questions): communications with the public, research, the new-issue process and exempt offerings.

Key concepts

Communications. Retail communications (distributed to more than 25 retail investors within 30 days) generally need principal approval before use; correspondence (25 or fewer) needs review but not pre-approval; institutional communications need written supervisory procedures.

New issues. After filing and before effectiveness (the cooling-off period), a rep may take indications of interest and deliver a preliminary prospectus but may not sell or send marketing materials.

Municipal primary market. Competitive sale: underwriters bid, the best net interest cost wins. Negotiated sale: the issuer picks an underwriter. The official statement is the muni equivalent of a prospectus.

Exempt offerings. Regulation D private placements to accredited investors, Rule 144A resales to QIBs, Regulation A for smaller offerings, and Section 3(a)(11) intrastate offerings.

Worked example

Correspondence vs. retail communication

A rep emails the same market commentary to 20 retail clients on Monday and 10 more on Thursday. Within 30 days it has gone to 30 retail investors, so it is a retail communication, not correspondence, and generally needs principal approval before use.

Common traps

An indication of interest is not a binding order.
Counting “within any 30-day period” per piece, not per day.

Practice questions on this topic

Series 7 practice questions: Seeks Business for the Broker-Dealer

A registered rep emails the same market commentary to 40 retail customers over two weeks. Under FINRA Rule 2210, this email is classified as:

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Frequently asked questions

How much of the Series 7 is seeks business for the broker-dealer?

Official outline section: F1: Seeks Business for the Broker-Dealer, 7% of the Series 7 (9 of 125 scored questions), per FINRA - Series 7 Content Outline (2025).

Sources

FINRA - Series 7 Content Outline (2025) (accessed 2026-09-23)
FINRA Rule 2210 - Communications with the Public (accessed 2026-09-23)

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