Canadian Securities Course (CSC) Practice Exam · Question
A Registered Representative (RR) receives a market order from a client to sell 500 shares of XYZ Corp. If the RR delays the order execution to prioritize a personal trade, what rule are they violating?
The client priority rule, or 'front-running' rule, states that client orders must take precedence over an investment advisor's or firm's own orders.
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Question: A Registered Representative (RR) receives a market order from a client to sell 500 shares of XYZ Corp. If the RR delays the order execution to prioritize a personal trade, what rule are they violating?
Answer options: ✅ Client priority rule
- Best execution rule
- Suitability rule
- Know Your Client (KYC) rule
Correct answer: Client priority rule
Explanation: The client priority rule, or 'front-running' rule, states that client orders must take precedence over an investment advisor's or firm's own orders.
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