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

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What does CRD stand for in investment terminology?

Central Registration Depository
Capital Reserves Debenture
Comprehensive Resource Database
Central Reporting Division

The correct answer is: Central Registration Depository

In investment terminology, CRD stands for Central Registration Depository. It is an integral part of the financial industry, particularly for individuals and firms involved in securities trading and investment advising. The CRD system serves as a centralized database where broker-dealers and registered representatives are recorded, including their registrations, qualifications, employment history, and disclosures. This centralized format allows for streamlined regulatory oversight by bodies such as FINRA, enhancing investor protection by ensuring transparency regarding the credentials and backgrounds of financial professionals. This system is crucial for maintaining the integrity of the financial markets, as it helps regulators, firms, and investors to easily access and verify the qualifications and history of those who participate in the investment industry. The design of the CRD supports effective monitoring and enforcement of compliance standards, making it a fundamental component of the regulatory framework governing securities practices.