A Bank Is Considering Canceling Its Agreement with a Broker

question 21

Multiple Choice

A bank is considering canceling its agreement with a broker to which it currently leases space in its lobby. The new plan would include an agreement with a different broker, but bank employees would complete product sales. What should the compliance manager do FIRST?

• A) Establish a licensing program for bank employees
• B) Establish a training plan for employees who will be selling the nondeposit investment products
• C) Obtain copies of SEC and NASD rules regarding nondeposit investment products
• D) Determine the additional compliance risk for the bank as a result of this change

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Definitions:

Owner's Equity

The residual interest in the assets of a business after deducting liabilities, representing the owner's claim against the company's assets.

Accumulated Depreciation

The cumulative depreciation of an asset up to a single point in its life, representing the wear and tear or usage.

Depreciating Equipment

The process of allocating the cost of tangible assets over its useful life, reflecting wear and tear, and loss of value over time.

Service Revenue

Income earned by a company for the services it has provided to customers.