SIE practice questionmediumAccount Types - Prohibited Acts
A representative places an order in a client’s account without prior approval but claims it was for the client's benefit. This is:
- ARequired for market efficiency
- BPermitted for all registered reps
- CA prohibited discretionary trade unless discretionary authority is granted✓ Correct answer
- DMandated by FINRA for retirement accounts
Explanation
Why C — A prohibited discretionary trade unless discretionary authority is granted
Unless granted written discretionary authority, representatives may not place orders without client approval. This is not permitted, required, or mandated by any regulation in non-discretionary accounts.
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