Series 10 Cheat Sheet — 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.

Quick links:

• Guide Home
• FAQ
• Official Resources

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).

Bookmark table: fastest Series 10 decision sort

Supervisory triage flow

    flowchart TD
	  A["Trigger: request, alert, complaint, exception"] --> B{"Immediate customer or firm risk?"}
	  B -->|"Yes"| C["Pause or restrict activity"]
	  B -->|"No"| D["Gather facts and supporting records"]
	  C --> D
	  D --> E{"Authority / documentation / suitability complete?"}
	  E -->|"No"| F["Escalate and remediate before proceeding"]
	  E -->|"Yes"| G["Apply WSP workflow and approve/release if appropriate"]
	  F --> H["Document corrective action and retention trail"]
	  G --> H

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.

Authority quick-sort table

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.

Sales-practice red-flag quick table

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.

Five things to remember under pressure

1. If authority is unclear, the answer is verify first, not serve faster.
2. A complete supervisory answer usually includes both customer protection and evidence preservation.
3. Margin, AML, complaints, and communications are all process-control questions before they are rule-number questions.
4. A rep’s good intent does not cure a missing approval or missing record.
5. If the activity would be hard to defend in an audit, it is probably the wrong answer on Series 10.

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.