A broker-dealer compliance officer is evaluating trade surveillance alerts to identify improper execution and market practices. Match each prohibited market practice on the left with its corresponding description on the right.
- InterpositioningInserting a third-party broker-dealer between a customer order and the best available market price, causing additional costs.
- Marking the CloseEntering trades near the end of the market day to artificially influence the reported closing price of a security.
- FreeridingBuying securities in a cash account and selling them prior to paying for the original purchase in full.
- Backing AwayFailing by a market maker to execute an order at its published bid or offer price for the stated minimum quantity.
Cevap
Interpositioning matches inserting an unnecessary third-party broker-dealer between a customer and the best market; Marking the Close matches placing trades near market close to manipulate closing prices; Freeriding matches selling securities in a cash account before paying for the purchase; Backing Away matches a market maker failing to honor a firm quote.
Interpositioning involves introducing an unnecessary third party to an execution path to the client's detriment. Marking the Close is entering orders near the market close to artificially alter the closing price. Freeriding is selling securities prior to paying for their purchase in a cash account. Backing Away is a market maker refusing to fulfill a published firm quote.
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Anahtar Kavram
Prohibited Market Manipulation and Execution Practices