Ethical and Professional Standards 【Reading 8】Sample
Which of the following statements is least accurate? It is permissible under the Standards to allocate trades: A)
| on a pro rata basis over all suitable accounts based upon account value. |
| B)
| on a pro rata basis over all accounts. |
| C)
| on a pro rata basis over all suitable accounts on the basis of an advance indication of interest and indicated order size. |
|
Allocating trades on a pro rata basis, pro rata based upon order size (when there are too few shares to fill all orders, e.g., filling 2/3 of all orders actually submitted), or pro rata based upon an advance indication of interest are all permissible. However, accounts must be checked for suitability. |