SIE (Securities Industry Essentials) Practice Exam

Under SEC Regulation S-P, what must a firm include in its customer privacy and opt-out notices?

1. A list of affiliated third-party companies

2. The policies to protect the security of nonpublic information

3. Annual financial statements

4. The names of all employees with access to customer information

The correct answer is: The policies to protect the security of nonpublic information

Under SEC Regulation S-P, a firm must include the policies to protect the security of nonpublic information in its customer privacy and opt-out notices. This is because the main purpose of these notices is to inform customers about how their personal information will be protected and used. Including a list of affiliated third-party companies (option A) or annual financial statements (option C) may be relevant information, but it is not required under Regulation S-P. Similarly, including the names of all employees with access to customer information (option D) may be important for transparency, but it is not a requirement under Regulation S-P. Thus, option B is the best and most accurate choice for what a firm must include in its customer privacy and opt-out notices under SEC Regulation S-P.