SIE practice questioneasyProhibited Activities - Best Execution
A broker-dealer intentionally delays executing a customer’s order to benefit its own trading. This practice is known as:
- AProhibited activity that violates the duty of best execution✓ Correct answer
- BNormal order routing
- CLegal under Regulation NMS
- DEncouraged for liquidity purposes
Explanation
Why A — Prohibited activity that violates the duty of best execution
Intentional delays benefiting the firm over the customer violate best execution obligations and are prohibited. Proper order routing and Regulation NMS require fair execution; benefiting liquidity does not justify this behavior.
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