How should a dealer report violations of MSRB rules?

• A. Report to a customer
• B. Promptly report to the appropriate supervisor and, if required, to regulatory authorities
• C. Post on social media
• D. File only if it involves more than $1 million

Answer: (B)

Reporting violations promptly to the appropriate supervisor and, if required, to regulatory authorities is the proper approach because it starts an immediate internal response and ensures regulators receive timely information for enforcement and oversight. This keeps the firm compliant and helps protect investors and the market.

Reporting to customers would breach confidentiality and isn’t how violations are handled. Posting on social media is inappropriate and could spread misleading information. The obligation isn’t limited to filings above a certain dollar amount; regulators may require reporting for violations regardless of size, so waiting for a threshold isn’t correct.