Series 14 Cheat Sheet — Compliance Officer Workflows, Rules & High-Yield Traps

Series 14 is a compliance officer exam: the best answer is usually the one that follows procedures, escalates appropriately, protects the customer/market, 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.

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Exam map (quick priorities)

Series 14 at a glance (FINRA)

• Items: 110
• Time: 3 hours (180 minutes)
• Passing score: 70
• Corequisites: none
• Cost: $350
• Effective date: 09/1989 – present

Job functions and weights

Study reality: F2 + F5 are your highest ROI areas. Build process discipline there first, then lock in points with F8/F6.

How Series 14 questions are written (exam mindset)

• Scenarios usually ask for the best or first compliance action: contain risk, follow WSPs, escalate, document.
• Wrong answers are often “business reasonable” but miss a required control (no evidence, no escalation, no record retention, no approval).
• The exam prefers answers that are procedural, documented, and auditable.

Compliance control ladder (high yield)

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

• Pause/contain risk (hold activity, stop distribution, restrict trading, freeze changes)
• Gather facts (who/what/when/why; pull records; confirm authority; verify data)
• Consult WSPs (the procedure is often the answer)
• Escalate (supervisor, compliance leadership, legal, AML/sanctions)
• Remediate (correct, retrain, enhance supervision, update controls)
• Document + retain (audit trail, approvals, exception logs, corrective actions)
• Report if required (regulatory or internal reporting workflow; high level)

    flowchart TD
	  A["Trigger: alert, complaint, inquiry, exception"] --> B["Triage + contain risk"]
	  B --> C["Gather facts + preserve evidence"]
	  C --> D["Apply WSP workflow + escalate"]
	  D --> E["Remediate + enhance controls"]
	  E --> F["Document + retain + report (if required)"]

Series 14 “best answer” checklist

• What is the risk: customer harm, market integrity, MNPI misuse, recordkeeping failure, capital/custody issue?
• What is the control: stop/hold, investigate, supervise, restrict, escalate, remediate?
• What is the evidence: records, approvals, timestamps, exception logs, certifications?

Bookmark table: fastest Series 14 triage

F5 — General supervision (high weight)

WSP lifecycle (how compliance “runs the firm”)

High-yield supervision themes

• Follow written process: if the stem mentions a policy, the safest answer uses that workflow.
• Delegation doesn’t transfer responsibility: the firm must review and test delegated work.
• Annual certification mindset: maintain evidence of reviews and escalations (high level).
• BCP mindset: plan + contacts + testing + updates (high level).
• Event reporting mindset: escalate “reporting requirement” fact patterns to the reporting workflow with documented facts (high level).

Common traps (F5)

• paying an unregistered person for securities activity without the right structure/controls
• allowing guarantees or sharing arrangements that misuse customer funds/securities
• failing to escalate a reportable event through the correct internal workflow

Soft dollars (high level)

Soft-dollar questions usually test conflict + documentation:

• ensure policies define what is permitted and who approves it
• document how conflicts are identified and controlled
• retain evidence that decisions follow the firm’s process

F2 — Markets and operations (high weight)

Sales practice and trading conduct themes

High-yield patterns the exam expects you to recognize:

• front running / trading ahead of customer orders or block transactions
• trading ahead of research and conflicts around dissemination (high level)
• fair pricing/commissions and outlier pricing outcomes (high level)
• best execution process discipline (routing decisions, reviews, documentation)

Trading operations and audit trail themes (high level)

• order handling: capture correct order type/modifiers and time stamps
• blocks and crossing activity can carry heightened scrutiny (high level)
• trade reporting accuracy/timeliness supports audit trails and surveillance (high level)
• “clearly erroneous” scenarios require timely escalation and documentation (high level)

SEC market-rule themes you should recognize (high level)

Surveillance and exception management (Series 14 angle)

Think like a surveillance program:

• define what to monitor (orders, executions, cancels, allocations, reports)
• set thresholds and patterns (volume spikes, price moves, concentration, wash-like patterns)
• investigate with full context (customer profile, time stamps, communications, approvals)
• remediate and document (training, restrictions, enhanced supervision)

Surveillance quick-sort table

F8 — Sales practice: customer and employee accounts (high yield)

Series 14 tests “account controls thinking”:

• recommendations must follow suitability/best-interest logic (high level)
• discretionary authority must be documented and supervised
• employee accounts and accounts at other firms create monitoring/conflict controls (high level)
• AML and sanctions awareness is part of the risk picture (high level)

Complaint angle: the safest answer is usually “log, investigate, respond, retain, and report if required” (high level).

F6 — Investment banking controls and MNPI (high yield)

High-yield compliance mindset:

• maintain information barriers and restricted lists where needed
• control research/report distribution and conflicts (high level)
• ensure offering workflow controls: approvals, disclosure discipline, distribution restrictions, record retention
• understand private offering process and notice/filing expectations (high level)

Tender offer trap (high level): if the stem hints at nonpublic tender offer information, the safe move is usually to restrict activity and escalate.

F3 — Broker-dealer operations (records and reporting)

Series 14 expects “audit trail first” thinking:

• confirmations and transaction records must be accurate and retained
• customer account information and changes must be documented and approved where required
• written complaints are logged, retained, and routed for response and reporting
• short-interest and ownership reporting triggers must be recognized and escalated (high level)

Quick recordkeeping reflex: if a decision is made, the exam often expects there to be evidence of who reviewed it and when.

F4 — Credit regulation and capital requirements (high level)

Exam-level takeaways:

• know what the net capital and customer protection rules are trying to do (firm solvency + customer asset protection)
• margin rules (including Regulation T concepts) drive account supervision and required records
• prime brokerage and joint back-office arrangements require clear responsibilities and documentation even when functions are shared

Common trap: treating “outsourced/shared” as “no longer our responsibility.”

F7 — Registration workflows (high level)

Typical exam moves:

• confirm registration category requirements for activities performed (high level)
• escalate statutory disqualification issues
• keep filings current and documented (U4/U5/BD updates and evidence of review)
• track CE and remediation for missed requirements (high level)

F9 — Communications and telemarketing (high level)

High-yield rules logic:

• communications must be fair and balanced; disclaimers don’t fix a misleading main message
• approvals, supervision, and record retention are core controls
• telemarketing requires process controls (do-not-call, time restrictions, script supervision; high level)

Communication-review quick table

F1 — Regulatory agencies and disciplinary process awareness

Know the “shape” of the ecosystem:

• what FINRA does vs what the SEC does (high level)
• that some rules come from other SROs (e.g., MSRB) depending on product/activity (high level)
• that disciplinary/arbitration processes require evidence preservation and documentation discipline

Common exam traps (Series 14)

• choosing “handle it informally” instead of following a written procedure
• approving or allowing activity without required documentation or supervisory sign-off
• using disclaimers to “fix” a misleading communication
• failing to preserve evidence and create an audit trail during an investigation
• failing to escalate reporting-sensitive events through the correct workflow

Five things to remember under pressure

1. The compliance answer is usually the one you can prove later.
2. A surveillance alert is not resolved until the evidence trail is complete.
3. Outsourcing, delegation, or another department never removes the firm’s control responsibility.
4. If a communication is misleading at the top, the footer will not save it.
5. For Series 14, containment plus documentation usually beats speed plus assumption.

Glossary (Series 14 level)

• AML: anti-money laundering program requirements (high level).
• BCP: business continuity plan; maintained, tested, and updated (high level).
• Best execution: process to seek the most favorable terms reasonably available; compliance tests process and outcomes (high level).
• CAT: Consolidated Audit Trail (audit trail concept; high level).
• CIP: Customer Identification Program; identity verification at onboarding.
• CTR / SAR: Bank Secrecy Act reporting concepts (high level).
• Disqualification / statutory disqualification: disqualifying events that can restrict association/registration (high level).
• DNC: do-not-call process controls in telemarketing supervision (high level).
• Form BD / Form U4 / Form U5: broker-dealer and individual registration/termination forms (high level).
• Form CRS: relationship summary delivery concept under Reg BI framework (high level).
• Information barrier: controls used to prevent the misuse of MNPI (high level).
• MNPI: material nonpublic information; triggers restrictions and escalation.
• Net capital: solvency requirement concept; monitored under SEC/FINRA rules (high level).
• OFAC: sanctions framework; screening and escalation concepts (high level).
• Reg M / Reg NMS / Reg SHO: SEC regulations affecting distributions, market structure, and short sales (high level).
• Soft dollars: brokerage commissions used for research-type benefits under certain conditions (high level).
• TRACE: trade reporting concept for certain fixed income securities (high level).
• WSPs: written supervisory procedures; the “source of truth” for controls and evidence.