Q:
A sales representative solicits and executes a mutual fund trade, but fails to record the trade with the broker-dealer. Under the Uniform Securities Act, this action would be:
a) Allowed, but only if no commission was taken on the trade
b) Allowed, since mutual fund trades are not required to be kept on the broker-dealer’s books
c) Prohibited
d) Allowed, since mutual fund trades are recorded on the mutual fund company’s books
A:
The correct answer is c).
This would be considered a private securities transaction, which is not permitted. All securities trades must be entered into the broker-dealer’s books.

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