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Free Series 14 Practice Questions

10 free, exam-style Compliance Officer Qualification Examination (Series 14) practice questions with answers and explanations. No signup required. Work through them below, then take the full free Series 14 practice test to study every exam domain.

Question 1

A FINRA member firm operates a branch office designated as an Office of Supervisory Jurisdiction (OSJ) where 30 registered representatives process customer orders. During a routine compliance review, the Chief Compliance Officer discovers that the OSJ has not been inspected in 14 months. The last inspection was conducted by the branch manager who oversees that office. Based on FINRA Rule 3110, the CCO should conclude that:

  1. The inspection is overdue because OSJs must be inspected at least every 12 months, though the branch manager was an appropriate inspector
  2. The inspection is overdue because OSJs must be inspected at least annually, and the inspection should not have been conducted by the branch manager who supervises that office
  3. The inspection is not yet overdue because non-OSJ branch offices require inspection only every three years
  4. The inspection is overdue but permissible because any registered principal may inspect any branch office regardless of their supervisory relationship to it
Show answer & explanation

Correct answer: B - The inspection is overdue because OSJs must be inspected at least annually, and the inspection should not have been conducted by the branch manager who supervises that office

Question 2

At 2:15 PM Eastern Time, the S&P 500 Index has declined 14% from the previous day's closing value, triggering a Level 2 market-wide circuit breaker halt. Trading is halted for 15 minutes and then resumes. Later that afternoon, at 3:35 PM, the S&P 500 reaches a decline of 20% from the prior close. Under NYSE Rule 7.12, what happens next?

  1. A 15-minute Level 3 halt is triggered, after which trading resumes for the final minutes of the session
  2. No additional halt is triggered because it is after 3:25 PM and only Level 3 halts can occur after that time - but Level 3 requires a separate triggering event
  3. Trading is halted for the remainder of the trading day because a Level 3 circuit breaker halt triggered by a 20% decline results in a full-day halt regardless of the time
  4. The exchange extends trading hours by 15 minutes to compensate for the earlier Level 2 halt
Show answer & explanation

Correct answer: C - Trading is halted for the remainder of the trading day because a Level 3 circuit breaker halt triggered by a 20% decline results in a full-day halt regardless of the time

Question 3

A registered representative recommends that a 72-year-old retired teacher with moderate risk tolerance and $400,000 in retirement savings invest 60% of her portfolio in a single high-yield bond fund. The representative reviewed the fund's prospectus but did not compare it to three similar lower-cost funds available on the firm's platform that had comparable yields and higher credit quality. Under SEC Regulation Best Interest, which specific obligation has the representative MOST likely failed to satisfy?

  1. The Disclosure Obligation, because the representative failed to disclose the fund's expense ratio to the customer
  2. The Care Obligation, because the representative did not exercise reasonable diligence to understand reasonably available alternatives, including their costs
  3. The Conflict of Interest Obligation, because the representative must eliminate all conflicts before making a recommendation
  4. The Compliance Obligation, because the firm failed to establish written policies regarding suitability determinations
Show answer & explanation

Correct answer: B - The Care Obligation, because the representative did not exercise reasonable diligence to understand reasonably available alternatives, including their costs

Question 4

A compliance officer at a broker-dealer identifies a pattern of wire transfers from a customer's account: over the past three weeks, the customer has wired $8,000, $6,500, and $9,000 to different accounts at foreign banks in a jurisdiction known for weak AML controls. The compliance officer files a Suspicious Activity Report (SAR) with FinCEN. Two days later, the customer calls and asks whether the firm has filed any reports about their account. The compliance officer should:

  1. Confirm the SAR was filed, as the customer has a right to know about any regulatory filings related to their account
  2. Neither confirm nor deny the existence of a SAR filing, as disclosing the existence of a SAR to the subject is prohibited under the Bank Secrecy Act's no-tipping provision
  3. Inform the customer that a SAR was filed but that it is a routine regulatory matter and does not indicate any wrongdoing
  4. Decline to answer and immediately close the customer's account to prevent further suspicious activity
Show answer & explanation

Correct answer: B - Neither confirm nor deny the existence of a SAR filing, as disclosing the existence of a SAR to the subject is prohibited under the Bank Secrecy Act's no-tipping provision

Question 5

An officer and director of a publicly traded SEC-reporting company acquired 200,000 restricted shares through a private placement 7 months ago. The company has 10,000,000 shares outstanding, and the average weekly trading volume over the preceding four weeks is 80,000 shares. Under Securities Act Rule 144, what is the MAXIMUM number of shares the officer may sell during the current 90-day period?

  1. 200,000 shares, because the 6-month holding period for a reporting company has been satisfied and volume limits do not apply to restricted shares
  2. 100,000 shares, which is the greater of 1% of shares outstanding (100,000) or the average weekly trading volume (80,000)
  3. 80,000 shares, which is the average weekly trading volume over the preceding four weeks
  4. None, because the officer must wait 12 months before reselling restricted shares acquired in a private placement
Show answer & explanation

Correct answer: B - 100,000 shares, which is the greater of 1% of shares outstanding (100,000) or the average weekly trading volume (80,000)

Question 6

In April 2026, a registered representative at a FINRA member firm sends a $275 gift basket to a compliance director at a client firm to thank her for a successful year of business. The representative was not present when the gift was delivered. Under the amended FINRA Rule 3220, effective March 30, 2026, this gift is:

  1. Prohibited, because gifts to employees of other firms may not exceed $100 per person per year
  2. Permitted, because the $275 value is below the current $300 per person per year gift limit
  3. Prohibited, because all gifts to employees of other firms require prior written approval from the recipient's employer regardless of value
  4. Permitted only if the representative was present at the time of delivery, which would reclassify it as entertainment rather than a gift
Show answer & explanation

Correct answer: B - Permitted, because the $275 value is below the current $300 per person per year gift limit

Question 7

A market maker on an OTC equity security holds a customer's limit order to buy 500 shares at $25.00. Minutes later, the market maker executes a proprietary purchase of 1,000 shares of the same security at $25.00 without first filling the customer's order. Which FINRA rule has the market maker MOST directly violated?

  1. FINRA Rule 5310 (Best Execution), because the market maker failed to obtain the most favorable terms for the customer
  2. FINRA Rule 5320 (Manning Rule), because the market maker traded ahead of the customer's limit order at a price that would have satisfied it
  3. FINRA Rule 5270 (Front Running), because the market maker established a position in anticipation of a block transaction
  4. FINRA Rule 2121 (Fair Prices and Commissions), because the market maker charged an excessive markup on the proprietary transaction
Show answer & explanation

Correct answer: B - FINRA Rule 5320 (Manning Rule), because the market maker traded ahead of the customer's limit order at a price that would have satisfied it

Question 8

A broker-dealer that clears customer transactions and holds customer funds uses the aggregate indebtedness method for computing net capital under SEC Rule 15c3-1. The firm's current aggregate indebtedness is $2,400,000 and its net capital is $175,000. The compliance officer should determine that:

  1. The firm is in compliance because net capital of $175,000 exceeds the $50,000 minimum for introducing firms
  2. The firm must immediately notify the SEC and FINRA because aggregate indebtedness exceeds 1,500% of net capital, which is above the early warning threshold of 1,200%
  3. The firm is in compliance because the ratio of aggregate indebtedness to net capital is approximately 13.7 to 1, which is below the 15-to-1 maximum
  4. The firm is in violation because as a carrying firm the minimum net capital is $250,000, regardless of the aggregate indebtedness ratio
Show answer & explanation

Correct answer: D - The firm is in violation because as a carrying firm the minimum net capital is $250,000, regardless of the aggregate indebtedness ratio

Question 9

A registered representative contacts the compliance department because a 78-year-old client's adult son has been calling repeatedly, pressuring the representative to wire $150,000 from his mother's account to his personal bank account. The client, when reached separately, seems confused and unable to explain why the transfer is needed. Under FINRA Rule 2165, the firm may:

  1. Place a temporary hold on the disbursement for up to 15 business days if there is a reasonable belief that financial exploitation of the client is occurring, and promptly notify the trusted contact person on file
  2. Immediately transfer the funds as requested because the son may have a valid power of attorney, and the firm has no authority to delay customer disbursements
  3. Place an indefinite hold on the account pending a court order, as FINRA Rule 2165 authorizes firms to freeze all account activity when financial exploitation is suspected
  4. Report the situation to local law enforcement but proceed with the wire transfer, as a temporary hold is only permitted for customers under the age of 65
Show answer & explanation

Correct answer: A - Place a temporary hold on the disbursement for up to 15 business days if there is a reasonable belief that financial exploitation of the client is occurring, and promptly notify the trusted contact person on file

Question 10

A FINRA member firm's marketing department creates an email campaign about a new structured product and distributes it to 40 retail customers over a two-week period. The firm has been a FINRA member for three years. Under FINRA Rule 2210, which of the following statements is CORRECT regarding this communication?

  1. This is classified as correspondence because it was sent via email, and correspondence requires only supervisory review under written procedures - no principal pre-approval or filing is needed
  2. This is classified as a retail communication because it was distributed to more than 25 retail investors within a 30-day period, and it must be approved by a principal before use and filed with FINRA's Advertising Regulation Department within 10 business days of first use
  3. This is classified as an institutional communication because it relates to a structured product, and institutional communications require only written procedures for principal review
  4. This is classified as a retail communication requiring principal pre-approval, but no FINRA filing is required because the firm has been a member for more than one year
Show answer & explanation

Correct answer: B - This is classified as a retail communication because it was distributed to more than 25 retail investors within a 30-day period, and it must be approved by a principal before use and filed with FINRA's Advertising Regulation Department within 10 business days of first use

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