Series 10 Cheatsheet — Supervision, Accounts, Sales Practices & Communications

Series 10 is a supervisor exam: the best answer is usually the one that follows written supervisory procedures (WSPs), protects the customer, escalates appropriately, and documents the control.

This cheat sheet is a study aid (not legal advice). Always follow your firm’s WSPs and current FINRA/SEC requirements.

Exam map (where points come from)

Series 10 at a glance (FINRA)

• Items: 145 scored + 10 unscored (155 total)
• Time: 4 hours
• Passing score: 70

Job functions and weights

How Series 10 questions are written (exam mindset)

• Most questions are scenario-based: a rep action, a customer request, or a process failure—then “what should the supervisor do next?”
• The exam rewards controls thinking over rule-number memorization: pause risky activity, verify, escalate, and document.
• Many wrong answers are “business reasonable” but skip a required control (missing authority, missing documentation, no verification, no escalation).

Series 10 “best answer” checklist (use on every scenario)

• Identify the risk: customer harm, disclosure failure, conflict, misuse of authority, or market abuse red flags.
• Select the control: stop/hold the activity, escalate, investigate, document, remediate.
• Follow WSPs: route to the right principal/compliance/legal workflow.
• Protect the customer: verify identity, verify authority, confirm instructions, prevent unauthorized activity.
• Document and retain: evidence of review, approvals, and corrective action.

Supervisor control ladder (high yield)

When the stem feels “wrong,” the safest supervisor flow is usually:

• Pause the activity (hold the order, delay disbursement, stop distribution of a communication).
• Verify the facts (identity, authority, documentation, suitability/best-interest basis).
• Escalate (principal/compliance/AML/legal) using your firm’s workflow.
• Remediate (correct the issue, retrain, impose heightened supervision, reverse errors where permitted).
• Record it (books and records + evidence of review/approval + corrective action).

Rule and regulation map (Series 10 scope, high level)

Series 10 isn’t a pure rule-number memorization exam, but you should recognize the “direction” of key rules and when they drive supervision.

High-weight supervision workflows (F2 + F3)

New account approval (F2)

Fast checklist:

• Identity verified (CIP) and documentation complete.
• Authority is clear (POA/entity authority/trust docs).
• Profile is complete and reasonable (objectives, risk tolerance, experience, time horizon).
• Required disclosures delivered (privacy, margin/options where applicable).
• AML/OFAC screening performed; red flags escalated.
• Records retained and approval evidence logged.

High-yield trap: approving an account with missing authority documents or inconsistent profile facts is often the wrong answer.

Authority and “who can do what” (F2)

Series 10 loves authority mistakes. When a customer request involves money movement, trading authority, or account changes, ask:

• Who is the customer of record? individual vs joint vs entity vs trust
• Who is requesting the change? owner vs authorized agent vs third party
• What proof of authority exists? POA, corporate resolution, trust documents, court appointment
• Is the request consistent with standing instructions and recent account changes?

High-yield trap: a “helpful” rep acting on verbal instructions without documented authority.

Funds movement and disbursements (F2)

Red flags that usually trigger verification + escalation:

• recent address/phone/email change + immediate wire request
• third-party wires without standing instruction/verification
• disbursement to newly added bank instructions
• foreign address changes or unusual jurisdiction patterns
• customer appears coached or instructions are inconsistent

Supervision move: verify identity and authority, follow callback/out-of-band verification controls, screen for sanctions triggers, document the decision.

Account maintenance changes (F2)

High-yield scenario patterns:

• Address change + wire request: treat as high risk → verify identity/authority using stronger controls.
• Name/title change: require documentation and update records; verify the requester’s authority.
• POA added/changed: verify scope and acceptance; update supervision notes; retain evidence.
• Foreign address changes: expect extra verification and potentially enhanced screening controls.

Margin and credit extensions (F2)

What supervisors are tested on:

• recognize when a margin call exists (Reg T vs maintenance)
• know what actions are permitted (call, liquidation, extensions, documentation)
• apply house requirements and concentration/volatility risk monitoring
• identify prohibited “workarounds” that hide or defer a call without proper steps

Margin “concept map”:

Complaints and trade errors (F3)

Two recurring exam moves:

• Complaint: capture, acknowledge, escalate, investigate, retain.
• Trade error: correct transparently (cancel/rebill or error account), don’t “park” trades or shift losses to a customer.

Complaint handling quick checklist:

• log it and preserve the communication
• route to the right supervisory/compliance team
• investigate and document findings
• take corrective action (and update supervision plan if needed)
• retain records per policy

Daily trade review and sales practice supervision (F3)

Common “supervision triggers” the exam tests:

• concentration and oversized positions relative to the profile
• high turnover / excessive trading inconsistent with objectives
• switching between products without a customer benefit (costs outweigh)
• unusual commissions/markups/fees or inconsistent pricing outcomes
• high-risk products sold to customers who don’t fit the profile
• restricted list / information barrier situations (conflicts, MNPI risk)
• short sale / market conduct red flags that require escalation (high level)

Supervisor move: identify the pattern, pause activity where needed, investigate, remediate, and document.

Product supervision “one-page” (F3)

Series 10 expects you to spot the product risk and the missing disclosure/control.

Employee accounts and personal trading (F3)

The exam angle is conflicts and market integrity:

• employees may be subject to personal trading monitoring and restrictions
• restricted list / information barrier conflicts can make trades prohibited
• obvious “wrong answers” involve front running, misuse of MNPI, or bypassing firm controls

Personnel and branch controls (F1)

Hiring, registration, and disclosures

High-yield concepts Series 10 tests:

• review and verify information used for registration (Form U4/U5 at a high level)
• ensure fingerprints/qualifications are completed and tracked
• recognize statutory disqualification themes and escalate
• keep registrations and disclosures current (disciplinary/criminal events, conflicts)

Outside activities, conflicts, and supervision plans

Common supervisor responsibilities (high level):

• review and approve outside business activities (OBAs)
• supervise private securities transactions (PSTs) under firm policy
• monitor noncash compensation and incentives that can create conflicts
• document and apply heightened supervision plans when risks or prior issues exist

Training, continuing education, and branch inspections

• ensure new-product training is completed before activity is allowed
• track CE and annual compliance meeting expectations (high level)
• perform branch inspections and follow up on findings
• remember that delegation does not remove supervisory responsibility: test and document

Communications supervision (F4)

Retail communications vs correspondence vs institutional

• Retail communication: broad distribution to retail; often requires principal approval and sometimes filing controls.
• Correspondence: customer-specific messages; still must meet content standards and be supervised/retained.
• Institutional communication: sent only to institutional recipients; still must be fair, accurate, and appropriately disclosed.

High-yield trap: disclaimers don’t fix a misleading headline. The “main message” must be fair and balanced.

Social media and seminars

Supervisor mindset:

• clarify whether it is static (advertising-like) vs interactive (supervision/record retention still required)
• ensure no guarantees, promissory language, or cherry-picked performance
• verify certification/designation usage is allowed and accurately described
• retain records and evidence of review

Telemarketing basics

• maintain and honor do-not-call requests per firm process
• follow time-of-day restrictions
• supervise scripts and required disclosures (high level)

High-yield “wrong answers” to avoid

• “Approve it anyway and fix later” when documentation is missing.
• “Let the rep handle it directly” when a control or escalation is required.
• “Move the trade to another account” to hide an error.
• “Use a disclaimer” as the only fix for a misleading communication.
• “Rely on memory” instead of WSPs, documented approvals, and audit trails.

Glossary (Series 10 level)

• ACATS: automated customer account transfer process (moving accounts between firms).
• AML: anti-money laundering program requirements (high level).
• CIP: Customer Identification Program; verify identity at onboarding.
• CRD: Central Registration Depository for registration/disclosure history (high level).
• CTR: Currency Transaction Report concept (bank secrecy reporting; high level).
• Discretionary account: account where the rep can trade without prior consent for each trade, subject to written authority and supervision.
• DNC list: do-not-call list requirements in telemarketing supervision.
• DVP/RVP: delivery-versus-payment / receive-versus-payment settlement instructions.
• Error account: firm account used to resolve trade errors transparently.
• House call / house requirement: firm-set margin requirement above minimums.
• Institutional communication: communications sent only to institutional recipients, with different approval/review expectations (high level).
• KYC: know-your-customer; maintain a reasonable customer profile for recommendations and supervision.
• MNPI: material nonpublic information; creates trading restrictions and conflict controls.
• OBA: outside business activity; typically requires disclosure and approval under firm policy.
• OFAC: sanctions screening and escalation framework (high level).
• OSJ: office of supervisory jurisdiction (location category; high level).
• PDT: pattern day trader concept (higher-risk trading profile; high level).
• POA: power of attorney; must be documented and within scope.
• Portfolio margin: risk-based margin methodology requiring special approvals/monitoring.
• PST: private securities transaction; outside securities activity requiring firm involvement/supervision (high level).
• Reg BI: Regulation Best Interest; recommendation must be in the customer’s best interest and conflicts must be addressed.
• Reg S-P: privacy and safeguarding of customer information.
• Reg T: Federal Reserve regulation governing initial margin/credit extension basics.
• Retail communication: communications distributed broadly to retail investors; often requires principal approval and may have filing controls.
• SAR: suspicious activity report concept (escalation/filing process; high level).
• SMA: Special Memorandum Account; margin buying power concept.
• Statutory disqualification: disqualifying events that can restrict registration eligibility (high level).
• Suitability: recommendation must fit the customer profile; Series 10 tests the supervision process more than rule text.
• U4 / U5: registration forms used to disclose and update associated person information (high level).
• WSPs: written supervisory procedures; your “source of truth” for controls, approvals, and escalation.