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Zorluk: ZorBroker-Dealers, Investment Advisers, and Intermediaries

A financial firm fills a customer's equity purchase order directly out of its proprietary account inventory. Simultaneously, the issuing corporation hires a third-party intermediary to record changes of share ownership and cancel old stock certificates. Which statement correctly identifies the capacity in which the firm filled the trade and the intermediary performing the recordkeeping function?

  1. The firm acted as a dealer in a principal capacity, and the transfer agent performs the recordkeeping function.Cevap
  2. B
    The firm acted as a broker in an agency capacity, and the National Securities Clearing Corporation (NSCC) performs the recordkeeping function.
  3. C
    The firm acted as a dealer in a principal capacity, and the Depository Trust Company (DTC) performs the recordkeeping function.
  4. D
    The firm acted as a broker in an agency capacity, and the prime broker performs the recordkeeping function.

Cevap

The firm acted as a dealer in a principal capacity, and the transfer agent performs the recordkeeping function.
When a securities firm fills a trade out of its own inventory, it acts as a dealer in a principal capacity. The issuer's transfer agent is the intermediary responsible for tracking official share ownership, canceling old certificates, issuing new ones, and distributing corporate communications.

Adım Adım Çözüm

1
Determine the firm's execution capacity based on trade execution mechanics.
Because the firm filled the customer's order directly from its own inventory account rather than finding an outside counterparty, it acted for its own account as a principal (dealer).
Broker-dealers acting as dealers trade as principals for their own accounts, earning revenue via mark-ups or mark-downs.
2
Identify the intermediary responsible for issuer shareholder recordkeeping.
The transfer agent is the designated entity responsible for maintaining ownership records of issuer securities, canceling old certificates, and issuing new ones.
Clearing entities such as NSCC and depositories such as DTC manage clearing netting and institutional street-name custody, whereas transfer agents maintain the official record of registered holders for corporations.

Anahtar Kavram

Broker-Dealer Capacities and Transfer Agent Intermediary Functions
Tahmini Süre:1m 30s
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Broker-Dealers, Investment Advisers, and Intermediaries

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