SIE practice questionhardTrade Execution
A broker 'interpositions' another firm between itself and the market to handle a client order. What is the regulatory issue?
- AIt guarantees price improvement.
- BIt is a required practice for all OTC trades.
- CIt may prevent best execution for the client.✓ Correct answer
- DIt is required when acting as agent.
Explanation
Why C — It may prevent best execution for the client.
Interpositioning is prohibited if it disadvantages the client or prevents best execution. It's not a regulatory or agency requirement, nor does it guarantee price improvement.
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