fb-regbi-0018
{
"person": "Retail customer of a broker-dealer",
"facts": "A representative recommends a variable annuity by phone at 10 a.m. and the customer authorizes the purchase on the call; the trade executes that morning. The firm's complete, accurate written disclosure of the relationship's scope, fees, and conflicts is delivered to the customer's portal at 4 p.m. the same day — after the recommendation and the execution.",
"question_context": "Every other element of the recommendation — care, conflicts treatment, compliance policies — is stipulated satisfied."
}Judged only against the quoted provisions of Regulation Best Interest, does this sequence satisfy the disclosure obligation? Answer with exactly one option id.
violates-disclosure-timing— No — the written disclosure must come prior to or at the time of the recommendationconsistent— Yes — same-day delivery of complete written disclosure satisfies the obligationviolates-care-customer-specific— No — a variable annuity cannot be recommended by phone
violates-disclosure-timing
240.15l-1(a)(2)(i) requires the broker-dealer, prior to or at the time of the recommendation, to provide the retail customer full and fair written disclosure. Delivery at 4 p.m., after a 10 a.m. recommendation and execution, is after the time of the recommendation; completeness and same-day delivery do not cure the sequence. Nothing in the quoted text forbids telephone recommendations.
Selects violates-disclosure-timing, citing the prior-to-or-at-the-time requirement.
“prior to or at the time of the recommendation, provides the retail customer, in writing, full and fair disclosure of”
Each quoted passage is exact-matched, after typographic normalization, against the corpus text fetched from the issuing authority (hashes in the corpus manifest). An item whose quote stops matching fails the build.
“The broker, dealer, or natural person who is an associated person of a broker or dealer, prior to or at the time of the recommendation, provides the retail customer, in writing, full and fair disclosure of:” — sec-regbi
The disclosure was delivered at 4 p.m., after the recommendation at 10 a.m., so it was not provided prior to or at the time of the recommendation as expressly required. Same-day delivery after the recommendation does not meet that timing requirement. The source contains no prohibition on making a recommendation by phone.
“prior to or at the time of the recommendation, provides the retail customer, in writing, full and fair disclosure of” — sec-regbi
The quoted disclosure obligation is satisfied only if written full-and-fair disclosure is provided prior to or at the time of the recommendation. The stipulated 10 a.m. oral recommendation and same-morning execution, followed by 4 p.m. portal delivery, occur after that time; same-day completeness does not change the sequence. The text does not prohibit telephone recommendations, so the care-based option is inapplicable. The key value and derivation therefore match the source as applied to the facts.
v1; no errata. Demonstrate a key error and the correction is published here, credited — challenge policy.