SIE practice questionhardFailure to Deliver
A seller fails to deliver securities by the settlement date. This is known as a:
- AFail to deliver✓ Correct answer
- BShort sale violation
- CRegulatory default
- DTrade cancellation
Explanation
Why A — Fail to deliver
When a seller does not deliver securities by the settlement date, it is called a fail to deliver. This can happen for various operational or trading reasons, including issues connected to short selling. It is not automatically a short-sale violation and does not mean the trade is canceled.
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