On Thursday, October 1, a retail investor purchases 500 shares of a Nasdaq-listed equity security through a broker-dealer. The firm fills the buy order by selling the stock to the customer directly from its proprietary inventory. Under SEC and FINRA rules, which of the following correctly identifies the capacity in which the broker-dealer acted, the required remuneration disclosure on the trade confirmation, and the standard regular-way settlement date for this transaction?
- The firm acted as a principal, must disclose the mark-up charged, and the trade settles regular-way on Friday, October 2.Cevap
- BThe firm acted as an agent, must disclose the commission charged, and the trade settles regular-way on Friday, October 2.
- CThe firm acted as a principal, must disclose the mark-up charged, and the trade settles regular-way on Monday, October 5.
- DThe firm acted as an agent, must disclose the commission charged, and the trade settles regular-way on Monday, October 5.
Cevap
The firm acted as a principal, must disclose the mark-up charged, and the trade settles regular-way on Friday, October 2.
When a broker-dealer fills a customer's order using its own inventory, it is acting as a principal (dealer) in the transaction. Written trade confirmations delivered at or before trade completion must explicitly state the capacity in which the firm acted and disclose the mark-up charged. Under standard SEC/FINRA regular-way settlement rules, equity transactions settle on T+1 (one business day after trade date). A trade executed on Thursday, October 1 settles on Friday, October 2.
Adım Adım Çözüm
Anahtar Kavram
Broker-Dealer Capacity Disclosures and T+1 Regular-Way Settlement Rules