Series 79 practice questionhardSyndicate Formation
Which of the following is a typical feature unique to a selected dealer agreement (SDA) as opposed to an agreement among underwriters (AAU)?
- ASDA typically limits dealer liability to shares allocated, without syndicate-wide liability✓ Correct answer
- BSDA establishes joint liability among all members
- CSDA determines compensation for managing underwriter
- DSDA covers issuer's representations and warranties
Explanation
Why A — SDA typically limits dealer liability to shares allocated, without syndicate-wide liability
SDAs limit liability to allocated shares, unlike AAUs, which may involve broader syndicate liability. Confusing the liability allocations is a common error in understanding syndicate structures.
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