SEC and FINRA Rules on AI for Advisors Quiz

Answers and explanations appear as you take the quiz.

1. What was the central message of FINRA Regulatory Notice 24-09 on generative AI?
   • Generative AI is banned for customer-facing use
   • Firms must register each AI model with FINRA
   • Existing technology-neutral rules continue to apply when firms use generative AI
   • AI-generated content is exempt from recordkeeping
2. Which FINRA rule requires a broker-dealer to have a supervisory system reasonably designed to achieve compliance, including for AI tools?
   • Rule 3110
   • Rule 2210
   • Rule 4511
   • Rule 206(4)-1
3. Under Rule 2210, when does an AI-drafted written message become a retail communication rather than correspondence?
   • When it contains any performance figure
   • When a principal has approved it
   • When it is posted on a website, whatever the audience
   • When it is distributed or made available to more than 25 retail investors within 30 calendar days
4. What happened to the SEC's July 2023 proposal on conflicts from predictive data analytics?
   • It was adopted with a 2026 compliance date
   • It was withdrawn in June 2025
   • It was merged into Regulation Best Interest
   • It was replaced by a FINRA rule
5. An RIA advertises that its portfolios are 'AI-optimized.' Which rule most directly governs whether that claim is allowed?
   • FINRA Rule 3110
   • Securities Exchange Act Rule 17a-4
   • The Advisers Act Marketing Rule, Rule 206(4)-1
   • Regulation Best Interest
6. An AI note-taker's meeting summaries are emailed to clients. According to the guide, how should the firm treat them?
   • Keep them as books and records and review samples for accuracy
   • Delete them after 30 days because a machine wrote them
   • Treat them as personal notes outside firm records
   • Send them only after FINRA pre-approves each one
7. A firm uses a vendor's AI model to suggest trades. What does the guide say about the firm's obligations?
   • The vendor takes on the firm's supervisory duties by contract
   • The firm stays responsible and should do due diligence on the model
   • Vendor tools are exempt if the vendor is SEC-registered
   • Only the vendor's own compliance team must test the model
8. Why might a firm block its client chatbot from recommending specific securities?
   • Chatbots cannot legally display ticker symbols
   • FINRA Rule 4511 bans automated recommendations
   • Such recommendations fall under Regulation Best Interest and must be in the customer's best interest and supervised
   • The SEC's withdrawn analytics rule would have required it