SIE Exam Question 441: Answer and Explanation

Question: 441

Which of the following is true of a new issue?

• A. A broker-dealer can accept payment from a new customer only if the preliminary prospectus is amended.
• B. A broker-dealer can accept payment from a new customer when the red herring is delivered.
• C. A broker-dealer can accept payment from a new customer when the registration is effective.
• D. A broker-dealer can accept payment from a new customer during and toward the end of the cooling off period.

Correct Answer: C

Explanation:

C: The registration must first be effective in order for a broker-dealer to accept payment from a customer. The other 3 are incorrect.