SIE practice questionmediumTrade Execution
A broker-dealer receives a client’s limit order. What must the broker-dealer do to ensure compliance with SEC and FINRA regulations?
- ACancel the order if it is not immediately executable.
- BExecute the order from firm inventory regardless of market price.
- CKeep the order confidential and unexecuted until contacted by the client.
- DDisplay the client’s limit order publicly if it will improve the market.✓ Correct answer
Explanation
Why D — Display the client’s limit order publicly if it will improve the market.
Limit order display rules require client orders that improve the market to be displayed. Executing from inventory or withholding the order violates regulations. Cancellation is not required unless the client chooses to do so.
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