Question

Difficulty: EasyAccount Statements, Privacy Protection, and Regulation S-P

Under SEC Regulation S-P, a registered broker-dealer is permitted to deliver its initial privacy notice to a new retail customer within 30 days after the customer relationship is established, provided no nonpublic personal information is shared with nonaffiliated third parties.

Answer: Answer

Answer

False. SEC Regulation S-P requires a broker-dealer to deliver an initial privacy notice to a retail customer at or before the time the customer relationship is established.

The statement is false because SEC Regulation S-P mandates that broker-dealers provide an initial privacy notice to retail customers at or before the time the customer relationship is established.

Step-by-Step Solution

1

Identify the regulatory timing requirement for delivering an initial privacy notice under SEC Regulation S-P.

Regulation S-P requires broker-dealers to deliver the initial privacy notice no later than when the customer relationship is established.

Retail customers must be informed of privacy policies and opt-out rights at the outset of their relationship with the financial institution.

2

Evaluate the statement's assertion of a 30-day grace period.

The statement is false because there is no general 30-day post-opening window allowed for initial notice delivery.

While firms must give customers a reasonable period (such as 30 days) to opt out of information sharing, the notice itself must be provided upfront.

Key Concept

Regulation S-P Initial Privacy Notice Delivery Timing

Estimated Time:45s

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Topics

Account Statements, Privacy Protection, and Regulation S-P