Quick Answer
Match the document to its trigger. An options account receives the options disclosure document (ODD), delivered at or before the account is approved for options trading. A mutual fund is matched with its prospectus, but the product label alone does not set a prospectus deadline.
How Does Operations Find the Correct Disclosure?
One account can hold products with different disclosure requirements. Review the product or account feature that triggers each document instead of choosing one document for the whole account.
| Trigger | Required document and timing | What should not control the choice? |
|---|---|---|
| Options account | Deliver the current ODD at or before the account is approved for options trading. | A mutual fund holding or an illiquid position does not replace the options-account trigger. |
| Mutual fund | Provide the mutual fund prospectus as the product-specific disclosure. | An ODD already in the file does not satisfy the mutual fund disclosure. |
| Illiquid security | Identify the actual product and provide the disclosure applicable to that product. | Illiquidity alone does not select the ODD, a mutual fund prospectus, or one universal illiquid-security document. |
Exam Tip: Gotchas
- Illiquidity does not create one universal disclosure. It tells operations to identify the actual security and its applicable product disclosure. It does not identify the document by itself.
When Does a Customer Receive the ODD?
The supported trigger is the options account. The member must deliver the current ODD at or before the customer's account is approved for options trading.
Exam Tip: Gotchas
- ODD delivery is a condition of account approval. Deliver the current ODD at or before the account is approved for options trading.
Why Does the Product Label Not Set the Prospectus Clock?
The Confirmations and Related Delivery lesson owns the prospectus clocks and their detailed sale or distribution conditions. This lesson uses the mutual fund prospectus to show how the document must match the product. The product label does not replace the separate conditions that determine whether a prospectus deadline applies.
Exam Tip: Gotchas
- A product label does not set a prospectus deadline. Match a mutual fund with its prospectus. Use the Confirmations and Related Delivery lesson for the separate clocks and their sale or distribution conditions.
What Should You Check on Exam Day?
- Match a mutual fund with its prospectus. Do not treat an ODD as a substitute. Use the Confirmations and Related Delivery lesson for prospectus clocks and their sale or distribution conditions.
- For an illiquid security, identify the actual product and its applicable disclosure. Illiquidity alone does not select one universal document.