SIE Understanding Trading, Customer Accounts and Prohibited Activities Question 46: Answer and Explanation

Question: 46

Ownership of a security is changed by which of the following actions?

• A. The purchaser is entered as owner on the books of the issuer.
• B. Publication in the Wall Street Journal
• C. Publication in a local newspaper of legal record
• D. Communication from the broker-dealer of the seller to the broker-dealer of the buyer

Correct Answer: A

Explanation:

A: Choice A is correct because each issuing firm keeps records of owners of its securities, so each change in ownership must be reflected in those records. Choices B and C are incorrect because publication is not used to change ownership of a security. Choice D is incorrect because this only occurs after the ownership change has been made on the books of the issuing firm.