SIE Understanding Trading, Customer Accounts and Prohibited Activities Question 33: Answer and Explanation

Question: 33

Which of the following are covered by both of the following rules: FINRA 5210 – Publication of Transactions and Quotations and MSRB G-13 – Quotations?

• A. Over-the-counter equity securities with prices published in multiple markets must be published with the same prices in each market, unless a customer submits a limit order.
• B. Published quotes must represent prices that investors can actually pay when buying or receive when selling.
• C. A broker-dealer must only make offers to buy or sell if willing to actually buy or sell at the prices offered.
• D. A member must process an order without separating it into multiple orders if the main cause for the multiple orders is to receive higher compensation.

Correct Answer: B

Explanation:

B: Choice B is correct because both rules have to do with published orders. Choice A is incorrect because this is covered in FINRA 6438 – Displaying Priced Quotations in Multiple Quotation Mediums. Choice C is incorrect because this is covered in FINRA 5220 – Offers at Stated Prices. Choice D is incorrect because this is covered in FINRA 5290 – Order Entry and Execution Practices.