SIE practice questionmediumBest Execution
Under FINRA's best execution rule, a broker-dealer is required to:
- AExecute all orders within 10 seconds of receipt
- BAlways execute orders at the National Best Bid and Offer (NBBO)
- CUse reasonable diligence to determine the best market for a security and execute at the most favorable price reasonably obtainable✓ Correct answer
- DRoute all orders exclusively to the NYSE
Explanation
Why C — Use reasonable diligence to determine the best market for a security and execute at the most favorable price reasonably obtainable
FINRA Rule 5310 requires broker-dealers to use reasonable diligence to determine the best market for a security and buy or sell at the most favorable price reasonably obtainable under prevailing market conditions. It does not require all orders to execute within 10 seconds, always guarantee the NBBO, or route exclusively to one exchange.
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