The Market Maker's Job

Rule 6 of 8 in this unit1.1.4

1.1.4 Market Participants and their Roles

SIE outline 1.1.4

Quotes both a buy and a sell price continuously. Rule 5250 permits payment for real underwriting work. NOT paid to publish a favorable quote.

The trick

Common trap: An issuer may pay a firm for a favorable quote. Correct: 5250 bars that payment, even while permitting paid underwriting. Underwriting: yes. A quote: never.

The method for this kind of question

Place the name on the map first

Now answer

1 question on this screen, from this outline item's own pool, so some will test a rule you met earlier in the unit. Pick an answer, say how sure you are, then reveal. Being sure and wrong is the most useful thing that can happen here, and the coach treats it that way.

Question 1Exam level

Which participant maintains the issuer's official record of registered owners and pays the dividends off it?

A. The registrar, which audits the issuer's share count B. The transfer agent, which keeps the issuer's owner list C. The custodian bank that safekeeps the customer's shares D. The Depository Trust and Clearing Corporation (DTCC)

How sure are you?

Sure Fairly sure Guessing

Correct: B. The transfer agent keeps the issuer's official register of owners, records ownership changes, and pays dividends off that register.

A. The registrar audits that work, reconciling shares outstanding against shares authorized; it keeps no owner list of its own.

C. A custodian safekeeps property but records no ownership.

D. DTCC settles between clearing firms and keeps no owner list.

Unit: SIE outline 1.1.4

Next ruleCustodian Holds It, Transfer Agent Records It

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