Series 6: Exercise

Exercise

Indicate whether the action is permitted or not permitted.

1. _____ A customer gives written permission to her registered representative to make discretionary trades for her one week after the first trade was made by that rep. She gave verbal permission prior to the first trade.

2. _____ A customer gives verbal permission for time and price discretion to his registered representative prior to any trades taking place. The trade executes that day.

3. _____ A customer gives written authorization to a third party to buy securities on her behalf.

Answers

1. Not permitted. Written consent for discretionary authority for a registered representative must be given prior to the first discretionary trade in an account. It is irrelevant when verbal permission is given for discretionary trades.

2. Permitted. For a time and price discretionary tr