Which is a duty of securities dealers in relation to clients?

Which is a duty of securities dealers in relation to clients?

• A. Duty of disclosure, duty of diligence, duty of loyalty
• B. Duty to maximize profits at all costs
• C. Duty to withhold information about risks
• D. Duty to trade only on behalf of the issuer

Answer: (A)

Dealers owe fiduciary duties to clients to ensure fair dealing and informed decisions. The duties of disclosure, diligence, and loyalty mean the dealer must reveal all material information and risks, carefully assess and monitor the client’s interests, and put the client’s interests ahead of the dealer’s own or the firm’s conflicts. The other options clash with this client-protective framework: trying to maximize profits at all costs would override the client’s interests; withholding information about risks prevents informed decision-making and breaches disclosure; and trading only on behalf of the issuer ignores the dealer’s role in serving the client’s needs.

Dealers owe fiduciary duties to clients to ensure fair dealing and informed decisions. The duties of disclosure, diligence, and loyalty mean the dealer must reveal all material information and risks, carefully assess and monitor the client’s interests, and put the client’s interests ahead of the dealer’s own or the firm’s conflicts. The other options clash with this client-protective framework: trying to maximize profits at all costs would override the client’s interests; withholding information about risks prevents informed decision-making and breaches disclosure; and trading only on behalf of the issuer ignores the dealer’s role in serving the client’s needs.