Difficulty: Hard

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In accordance with FINRA rules, a firm is required to retain records of which of the following social media or digital communications scenarios?

Rationale

A text message from an RR to a customer proposing a trade idea.

FINRA rules mandate that firms retain records of communications that relate to the firm's business, including any correspondence that could influence a customer's investment decisions. A text message proposing a trade idea directly pertains to the firm's advisory and trading activities, making it a required record.

A (A social media endorsement of a registered representative (RR) by a customer) YOUR ANSWER

While endorsements by customers can be significant, they do not directly relate to a firm's business activities as regulated under FINRA. Such endorsements may not involve specific investment advice or recommendations, and thus are not required to be retained by the firm.

B (A social media message to an RR highlighting a job posting) YOUR ANSWER

This scenario pertains to employment opportunities rather than investment advisory services or client interactions about securities. Therefore, it does not fall under the category of communications that FINRA requires firms to retain as part of their business records.

C (A text message from an RR to a customer proposing a trade idea) CORRECT

This communication is specifically related to investment advice and falls squarely within the scope of FINRA's record-keeping requirements. Since it involves a direct proposal that could influence the customer's trading decisions, it must be retained for regulatory compliance.

D (A text message from an RR to a customer, who is a friend, with an invitation to a barbecue) YOUR ANSWER

Although this message may be friendly, it does not pertain to the firm's business or investment advice. Personal invitations do not require retention under FINRA rules, as they do not involve any aspect of securities transactions or advisory.

Conclusion

FINRA rules are designed to ensure that all relevant communications regarding investment advice and trading are properly recorded and retained. Among the options, only the text message proposing a trade idea constitutes a business-related communication that requires retention, as it directly impacts the customer's investment decisions and aligns with regulatory standards.

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