When is it acceptable for a broker to commingle funds with a client?

By Investopedia AAA
A:

a. Never
b. When he or she has written approval from the firm



c. When he or she has written approval from the firm AND contributes equally to the account and shares equally in any losses that arise



d. Only if the agent's contributions to the account are two times GREATER than those of the client



Answer: C



It is considered fraudulent to commingle funds in an account, unless:
• Written authorization by the firm grants such.
• An agent contributes equally (monetarily) to the account.



RELATED FAQS

  1. Why is purchasing stocks on margin considered more risky than traditional investing?

    Learn why purchasing stocks on margin is riskier than traditional investing, although it can be more profitable when it is ...
  2. What is the difference between positive correlation and inverse correlation?

    Learn the difference between a positive correlation and a negative, or inverse, correlation and the way they apply to the ...
  3. What are my options when I get a margin call?

    Understand what a margin call means and the two primary options for meeting a margin call, such as depositing additional ...
  4. How do I sign up for a Series 63 exam as a foreign national if I don’t have a Social ...

    Learn how to sign up for a Series 63 exam, even if you do not have a Social Security card or CRD number, by using the Uniform ...
RELATED TERMS
  1. Fintech

    Fintech is a portmanteau of financial technology that describes ...
  2. Einhorn Effect

    The sharp drop in a publicly traded company’s share price that ...
  3. Discretionary Investment Management

    A form of investment management in which buy and sell decisions ...
  4. Execution Only

    A trading service that is restricted to execution of trades only, ...
  5. Business Broker

    A professional who specializes in the purchase and sale of companies. ...
  6. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee ...

You May Also Like

Related Articles
  1. Professionals

    How to Choose a Robo-advisor? Follow ...

  2. Trading Strategies

    Not All Online Trading Brokers Are Created ...

  3. Brokers

    How long does it take a broker to confirm ...

  4. Investing Basics

    The NASDAQ Pre-Market: What You Need ...

Trading Center