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Zorluk: OrtaBroker-Dealers, Investment Advisers, and Intermediaries

A broker-dealer fills a customer's order to purchase equity securities by selling the shares directly from its own inventory. How must the firm disclose its operational capacity and compensation on the customer trade confirmation?

  1. Acted as a principal (dealer) and disclosed a mark-upCevap
  2. B
    Acted as an agent (broker) and disclosed a commission
  3. C
    Acted as a clearing corporation (NSCC) and disclosed a clearing fee
  4. D
    Acted as an underwriter in a primary market distribution and disclosed a concession

Cevap

Acted as a principal (dealer) and disclosed a mark-up
When a firm fills an order using its own inventory, it acts as a dealer (principal capacity) and earns revenue by charging a mark-up (for buy orders) or mark-down (for sell orders). FINRA rules require that trade confirmations explicitly state whether the firm acted as an agent or principal.

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1
Identify the firm's role in filling the transaction
The firm traded directly with the client using its own inventory
Trading from inventory establishes that the firm acted for its own account as a principal (dealer).
2
Determine the appropriate compensation structure for principal transactions
The firm charges a mark-up on purchases (or mark-down on sales)
Dealers adjust the inventory price by adding a mark-up rather than charging a broker commission.
3
Select the proper trade confirmation disclosure requirements
The trade confirmation must reflect principal capacity and the mark-up amount
FINRA rules mandate explicit confirmation disclosure of capacity (agent vs. principal) and related mark-up/mark-down or commission.

Anahtar Kavram

Broker-Dealer Capacity and Compensation Disclosure
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Konular

Broker-Dealers, Investment Advisers, and Intermediaries

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