Under FINRA and SEC rules governing trade confirmations, settlement cycles, and corporate action procedures, match each regulatory scenario or event on the left with its correct defining operational requirement or timeline rule on the right.
- Regular-way cash dividend ex-dividend date (under T+1 settlement rules)Falls on the record date designated by the issuer's board of directors
- Large stock split or stock dividend (25% or greater) ex-dividend dateFalls on the first business day immediately following the payable date
- Broker-dealer executing a transaction in an agency capacityRequires written trade confirmation disclosure of the commission amount received
- Broker-dealer executing a transaction in a principal capacity from inventoryRequires written trade confirmation disclosure of the mark-up or mark-down charged
Answer
Regular-way cash dividend ex-dividend date matches the record date designated by the board of directors. Large stock split (25% or greater) ex-dividend date matches the first business day immediately following the payable date. Agency capacity transactions require confirmation disclosure of the commission amount. Principal capacity transactions require confirmation disclosure of the mark-up or mark-down charged.
Each item accurately pairs the corporate action or transaction scenario with its mandatory regulatory timeline or confirmation disclosure requirement under FINRA and SEC rules. Standard cash dividend ex-dates fall on the record date under T+1 settlement; large stock distributions (>=25%) have their ex-date set on the business day after the payable date; agency trades mandate commission disclosure; and principal trades mandate mark-up/mark-down disclosure.
Step-by-Step Solution
Key Concept
Settlement Rules, Ex-Dividend Dates, and Trade Confirmation Capacity Disclosures