SIE Understanding Trading, Customer Accounts and Prohibited Activities Question 35: Answer and Explanation

Question: 35

Which of the following are covered by both of the following rules: FINRA 5310 – Best Execution and Interpositioning and MSRB G-18 – Best Execution?

• A. Information about each trade will be submitted promptly to the Real-time Transaction Reporting System (RTRS)
• B. Inv Co Act 1940 17a-6 – Exemption for Transactions with Portfolio Affiliates
• C. Inv Co Act 1940 17a-7 – Exemption of Certain Purchase or Sale Transactions Between an Investment Company and Certain Affiliated Persons Thereof
• D. A broker-dealer will be conscientious in finding the best market and handling the trade to provide the best price practical to a customer.

Correct Answer: D

Explanation:

D: Choice D is correct because broker-dealers and municipal securities dealers have the obligation to arrange for the trade to be processed in the best way possible. Choice A is incorrect because this is covered in the rule MSRB G-14 – Reports of Sales or Purchases. Choice B and C are incorrect because they relate to mutual funds trading securities with portfolio affiliates or a category of affiliated persons.