One-Page Cheat Sheet

This is the whole book at a glance, in the order the Financial Industry Regulatory Authority (FINRA) outline sets. It assumes you have already worked through the units; each line is a memory jog, not a first lesson. If a line reminds you that you forgot something, open that unit's rapid-fire sheet.

Half the 50 scored items come from chapter 1 alone, and chapter 4 supplies three. Read the first block twice.

Seeking Business and Private Offerings (50%)

• Communications with the Public: Communications split three ways by audience: correspondence reaches 25 or fewer retail investors in any rolling 30 calendar-day period, a retail communication reaches more, and an institutional communication reaches institutional investors only. A registered principal approves each retail communication before the earlier of its use or its filing, while the other two categories run on written supervisory procedures. The content standards and the three-year retention rule, first two years easily accessible, reach all three alike. Excluded from filing never means excluded from those standards, and a private offering cannot be advertised like a registered one unless the accredited-only exemption applies.
• Securities Act Framework and Offering Types: The Securities Act defines security, issuer, underwriter, prospectus, and offer broadly, then splits an offering into three phases: no offers or sales before filing, offers and a preliminary prospectus once filed, and sales only once effective. An exempt security escapes registration permanently, while an exempt transaction exempts one sale and leaves the buyer holding a restricted security, which is why an issuer's public reporting status does not register its investors' resales. Selling without registration or an exemption brings rescission with no reasonable-care defense, and a material misstatement brings a separate liability that does have one.
• Regulation D Private Placements: Regulation D exempts an issuer's own offers and sales from registration, never from antifraud liability. The small-offering exemption is capped, the no-solicitation private placement is uncapped but bans general solicitation, and the accredited-only exemption permits advertising if every purchaser is accredited and verified. Sales to accredited investors are unlimited, while other purchasers cap at 35 in any 90 calendar days. Written information is owed only to a non-accredited purchaser under that exemption, the securities are restricted, and Form D is due 15 calendar days after the first sale.
• Investor Qualification and Resales: Investor qualification runs on three separate statuses. An accredited investor is a status entity with no dollar test, a threshold entity over $5 million, or a natural person over $1 million in net worth excluding the primary residence, over $200,000 individually or $300,000 jointly with a current-year expectation, or holding a designated license; only a general-solicitation offering forces verification steps. A qualified institutional buyer owns $100 million in unaffiliated securities, or $10 million as a dealer, and buys restricted paper in a resale with no holding period that leaves the securities restricted. A qualified purchaser owns $5 million, or $25 million as an institution, and lets a fund drop the investor-count cap.
• Regulation A, Regulation S and Intrastate Offerings: Three exemptions, three constraints. Regulation A is a qualified public offering: Tier 1 raises $20 million per rolling 12 months and keeps state registration, Tier 2 raises $75 million, preempts it but not the notice filing, caps a non-accredited purchaser at 10% of the greater of income or net worth, and files ongoing reports where Tier 1 files only an exit report. The intrastate exemption demands issuer residency, one of four 80% doing-business tests, in-state offers and sales, and a six-month resale limit. Regulation S needs an offshore transaction, no directed selling efforts, and its category conditions, with compliance periods from none to a year.
• Offering Communications and Research Safe Harbors: These rules protect registered deals. A tombstone follows a filed registration statement, keeps to a closed list of 21 permitted items, names underwriters, gives a prospectus contact, and adds a legend until the statement is effective; a proposed-offering notice comes earlier, disclaims any offer, and never names underwriters; generic advertising describes fund types without naming a fund. Three research safe harbors protect regular-course research, one by keeping the firm out of the underwriter definition and two by saying the report is not an offer, and only those two reach a qualified institutional buyer resale or an offshore deal. None lets a private issuer advertise.
• Mechanics of Distribution and Placement Agents: Five distribution methods split the risk of an unsold offering: firm commitment and standby put the placement agent on the hook, while best efforts, all-or-none, and mini-max leave the shortfall with the issuer. An indication of interest stays non-binding until a subscription is accepted, and the spread combines a dealer manager fee, a selling group commission, and sometimes warrants. An issuer's own associated person may sell without registering only inside a narrow safe harbor, and contingency money sits in a separate bank account or a written bank escrow until the contingency resolves.
• Due Diligence and Feasibility Studies: A broker-dealer that recommends a private placement owes its own reasonable investigation, sized to the deal. Regulation D exempts registration, not fraud, and neither a sophisticated customer base nor an audit ends the inquiry. Cover the five minimum items on every offering and sort the facts into the five components. Red flags override management's word, the offering document, and counsel's report. Drafting the memorandum raises the bar, leaning on counsel or a syndicate manager shifts work rather than responsibility, and only the written record proves the work was reasonable.
• Filing Obligations and Prohibited Compensation: Unless the private placement fits one of fourteen exempt categories, the member selling it files the offering documents with the Financial Industry Regulatory Authority, or notifies it that none were used, within 15 calendar days of first sale. That confidential notice does not replace the issuer's own Form D, and the member private offering rule applies instead when the member or a control entity is the issuer. Separately, paying an unregistered person for the business they bring in is prohibited on substance rather than label, with one narrow exception for a nonregistered foreign finder and foreign customers.

Opening Customer Accounts (18%)

• Account Opening Requirements: Every account record holds six items, three more are owed on reasonable efforts before the initial transaction settles, and an institutional account, defined by status or by $50 million in assets, skips several. Updated information is kept six years from the update, unchanged information six years after closing. An arbitration clause needs the seven-point disclosure, a highlighted pointer above the signature line, and delivery within 30 days unprompted or 10 business days on request. A retirement plan adds four fiduciary duties and the 25% plan-assets test.
• Customer Documentation and Screening: Identify a legitimate prospect and sign the confidentiality agreement before any non-public detail goes out. The identification program collects four items before opening and verifies identity within a reasonable time, while the know-your-customer duty runs on afterward. Full discretion needs written customer authorization, written firm acceptance, and written approval of each order, while time-and-price discretion needs none and dies at the end of the business day. Electronic delivery needs notice, access, and proof of delivery, and the privacy rule defaults to opt out.
• Customer Investment Profile: The investment profile is nine named facts plus an open catch-all, wanted alike by the suitability rule and Regulation Best Interest and gathered through reasonable diligence that no waiver can disclaim. Five financial factors, a longer list of personal circumstances, and one of four stated objectives fill it in, alongside tax mechanics where first in, first out is the default and long-term takes more than one year. Verification turns on the offering type, and the customer relationship summary goes out at the earliest of a recommendation, an order, or account opening, then again at each new trigger.
• Supervisory Approvals for Accounts: The firm owns supervision, designates registered principals, and writes and separately tests procedures reasonably designed to achieve compliance, reporting annually to senior management. An account opens only on a partner, officer, or manager's acceptance signature, never a verbal sign-off, and a post-opening change needs review plus documented customer confirmation, notification, or follow-up. Correspondence review may be risk-based, but the record names reviewer, item, and date. Safeguarding covers cash, monetary instruments, and securities, and currency above $10,000 aggregates across a customer's same-day activity.

Recommendations and Records (26%)

• Communicating Investment Information: One recommendation carries three disclosure duties. A product description must rest on fair dealing and good faith, stay fair and balanced, and give a sound basis for evaluating the product, so a stated benefit needs the risk that could defeat it. A material omission breaks that standard and can separately trigger antifraud liability, and the Securities Act's provision protects the purchaser. Regulation Best Interest adds written disclosure, before or at the time of the recommendation, of the relationship's scope and terms and of all material conflicts, which Form CRS never satisfies. On request, a customer holding cash or securities at the firm may inspect or receive its most recent balance sheet.
• Best Interest and Suitability: Identify the standard first: Regulation Best Interest for a retail customer, the suitability rule everywhere else, never both. Regulation Best Interest runs on Disclosure, Care, Conflict of Interest, and Compliance, and best interest is never simply the cheapest product, though cost must always be weighed. Suitability runs on reasonable-basis, customer-specific, and quantitative, where a series must be both excessive and unsuitable, while churning also needs control and commission intent. Test a position against the whole portfolio, demand both holding power and investment management talent before a concentrated one, and commit at least 85% of a member private offering's proceeds to business purposes.
• Portfolio Risk and Product Disclosures: Portfolio risk is inflation eroding constant-dollar value, marketability against the customer's liquidity need, a municipal bond that wins only in a high enough bracket, an issuer's call arriving when rates fall, a forced conversion the holder chooses because conversion value beats the call price, and maturity trading price risk against reinvestment risk, which a ladder spreads across time. On top sit service charges that must be reasonable and not unfairly discriminatory, a permissive temporary hold running 2 to notify and 15, 25, then 55 business days, and a dollar-and-percentage mark-up on a same-day-offset principal trade in corporate or agency debt.
• Books, Records and Regulation FD: A firm creates blotters, general ledgers, customer ledger accounts, order memoranda whether executed or not, and monthly trial balances, then preserves each for its own period from its own trigger: six years for the ledgers, three for order memoranda, six from account closing for account cards, life of the enterprise for organizational records. Regulation FD then binds the issuer, not the representative, to disclose material nonpublic information publicly, simultaneously when the disclosure was intentional and promptly when it was not, unless the recipient owed or accepted a duty of confidence.

Transactions and Complaints (6%)

• Processing and Confirming Transactions: A private placement is not ready to process until the issuer accepts the subscription agreement; the firm then keeps a blotter entry, principal approval, and payment instructions, and a subscription-way transaction excuses the order memorandum only where a substitute is kept, riding in that memorandum's three-year category. Settlement runs on the offering documents, and the payment-handling rule transmits the money to the issuer or holds it until the contingency occurs. The confirmation goes out at or before completion, and no firm may block a customer's account transfer absent a genuine lien or bona fide claim.
• Complaints, Disputes and Reporting: A written customer complaint puts a four-year file at the office of supervisory jurisdiction, kept by the member firm, not that office. Specified events reach FINRA within 30 calendar days, reported by the firm, never by the person directly, at more than $15,000 generally and more than $25,000 where the firm itself is sued. Disputes go to arbitration by who the parties are, barred after six years from arbitration but not from court, before one or three arbitrators by claim size. Form U4 is amended within 30 days, or 10 for a statutory disqualification.