Securities Trader Representative (Series 57) Practice Exam

If Broker-Dealer A executes a trade with Broker-Dealer B, what is Broker-Dealer A's reporting obligation?

1. Report the trade within 10 seconds

2. Report the trade within 20 minutes

3. Report the trade by 8:00 p.m.

4. None since Firm A is not required to report the trade

The correct answer is: Report the trade within 20 minutes

Broker-Dealer A's obligation to report trades to the relevant regulatory authority, such as FINRA, typically requires that the trade be reported within a specific timeframe to ensure that the marketplace remains transparent and regulated. The correct choice indicates that Broker-Dealer A must report the trade within 20 minutes. This timeframe ensures that market participants have access to timely information about trading activity, which is essential for fair and efficient markets. The 20-minute reporting period allows Broker-Dealers a reasonable amount of time to gather and submit the necessary details about the trade, which includes information like the price, quantity, and other critical data needed for compliance and recordkeeping. Timely reporting also helps maintain the integrity of market data that technical analysts and traders rely on. While there are other timelines that apply to different scenarios or specific types of securities, in the context of general trade reporting obligations, the 20-minute requirement aligns with the regulations set by authorities governing Broker-Dealers' activities. This contrasts with other options, which suggest more immediate or less stringent requirements that do not reflect the actual rules in place.