Which of the following statements is most accurate regarding cross-transactions between accounts at a broker-dealer?
Answer: D. Cross-transactions are direct transactions between two different clients with the same firm. For a broker-dealer, this creates a fairly obvious conflict of interest — the firm must execute transactions that are suitable for each customer, but there is a risk that the same transaction will benefit one client more than the other. A firm that engages in cross-transactions must obtain a signed waiver from its clients annually that acknowledges the activity.
d
D