You and a dealer at another bank have a verbal bilateral reciprocal arrangement to quote each other two-way prices. During periods of high volatility, the other dealer refuses to quote to you. What does the Model Code say about this situation?
A) The other dealer is bound to reciprocate.
B) This is not in any way an enforceable or binding commitment.
C) The Model Code does not comment on dealing reciprocity.
D) It is common market practice to suspend reciprocity in periods of high volatility.

Question

Quizplus · Accepted Answer

The Model Code does not create any legally binding commitments and therefore cannot enforce this bilateral reciprocal arrangement between dealers.

You and a Dealer at Another Bank Have a Verbal