10 Questions
What is the primary obligation of a registered person in conducting their business activities?
To act honestly, fairly and in the best interest of the client and the integrity of the market
What should a registered person ensure when advising or acting on behalf of a client?
That any representations or communications made to the client are accurate and not misleading
What is the primary purpose of SRC Rule 30.2?
To outline the transactions and responsibilities of broker dealers
Which of the following is a requirement for customer account statements?
A statement of the client's account balance
What is the primary purpose of SRC Rule 52.1.9?
To facilitate customer complaints against broker dealers
What should a broker dealer ensure when providing services to clients?
That the services provided are in the best interest of the client and the integrity of the market
Which of the following is a requirement for transactions and responsibilities of broker dealers?
To act in the best interest of the client and the integrity of the market
What should a registered person ensure when communicating with clients?
That the communications made to the client are accurate and not misleading
What is the primary purpose of SRC Rule 30.2.1?
To establish the Ethical Standard Rule for registered persons
What should a broker dealer ensure when providing services to clients?
That the services provided are in the best interest of the client and the integrity of the market
Study Notes
Ethical Standard Rule (SRC Rule 30.2.1)
- A registered person must act honestly, fairly, and in the best interest of their clients and the integrity of the market.
- Communications with clients must be accurate and not misleading, and must not violate SRC Rule 24.1(d).
- Factors to consider when determining if a communication is misleading include:
- Overall context
- Audience
- Overall clarity
Honesty and Fairness
- A registered person must ensure that representations or communications made to clients are accurate and not misleading.
- They must act in the best interest of their clients and the integrity of the market.
- The overall context in which a statement is made must be considered, as a statement may be misleading in one context but not in another.
Diligence
- A registered person must act with due skill, care, and diligence in the best interests of their clients and the integrity of the market.
- They must:
- Execute client orders promptly and in accordance with client instructions
- Execute client orders on the best available terms in compliance with SRC Rule 30.2.13
- Ensure that transactions are promptly and fairly allocated to client accounts
Other Rules
- SRC Rule 30.2 covers transactions and responsibilities of broker-dealers
- SRC Rule 52.1.8 covers customer account statements
- SRC Rule 30.2.5 covers commissions and charges for services performed by a broker-dealer
- SRC Rule 52.1.9 covers customer complaints
This quiz covers topics related to the SEC certification webinar for equities securities salesmen, including communication and audience considerations.
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