NASAA allows use of oral discretion for the first how many business days after the date of the first transaction?

• A. 5
• B. 10
• C. 15
• D. 20

Answer: (B)

The concept being tested is temporary oral discretion for a new account. NASAA allows a broker-dealer to place trades without a written discretionary agreement for a limited period after the first trade in the account, specifically for ten business days from the date of that first transaction. After that window, discretionary authority must be in writing to continue placing trades at the firm's discretion.

This balance gives a new account time to establish activity and confirm understanding of discretionary trading while protecting the client by requiring a written grant of discretion if the relationship continues beyond the initial period.