SIE Exam Question 67: Answer and Explanation

Question: 67

All of the following are true of the transferability of securities except that

• A. securities can be transferred between parties by physically exchanging stock certificates.
• B. a stock owner does not need the approval of the issuing organization of that stock to sell his or her shares.
• C. the secondary market is where the transferring of securities is executed.
• D. a broker dealer may assist in the transferring process of securities between two parties.

Correct Answer: A

Explanation:

Securities are transferable only after the owner either endorses the stock certificates or signs a power of substitution into the new owner's name. Owners may sell shares without the approval of the requisite issuing organization, securities transfers are executed in the secondary market, and broker dealers assist in the securities transferring process.