SIE practice questionhardProhibited Activities
A registered representative places customer orders after executing their own trades at better prices. This is prohibited under:
- ARegulation D
- BFront-running rules✓ Correct answer
- CMargin maintenance rules
- DInvestment Company Act of 1940
Explanation
Why B — Front-running rules
Executing personal trades before entering customer orders to obtain better prices is front-running. Regulation D covers private placements, margin maintenance rules govern margin equity, and the Investment Company Act regulates investment companies.
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