Investment Company and Variable Contracts Products Representative (Series 6)Practice Exam

Which party must report discrepancies or disclosures related to securities?

1. Compliance officer

2. Registered representative

3. Investor

4. Broker-dealer

The correct answer is: Registered representative

The registered representative plays a vital role in the securities industry as the primary point of contact between the investor and the firm. They are responsible for ensuring that all communications and transactions with clients are conducted in accordance with regulatory standards. When it comes to reporting discrepancies or disclosures related to securities, the registered representative has an obligation to identify and report any irregularities or concerns that may arise in the course of dealing with investors or executing transactions. This reporting duty is crucial because it helps maintain transparency and protects both the client and the integrity of the market. The registered representative must also inform clients about the risks and characteristics of the securities they are recommending, ensuring that investors are fully aware of their investments. While other parties, such as compliance officers and broker-dealers, also engage in oversight and regulatory compliance, the direct responsibility for initial reporting typically falls on the registered representative, as they interact most closely with investors. This interaction empowers them to notice and escalate any discrepancies that may affect investors.