Which of the following correctly states the Model Code's recommendations regarding electronic trading and broking?
A) Liquidity providers should be cognizant of reputational risks when supplying liquidity for onward third party consumption.
B) Market participants must not seek information as to the legal status of a potential counterparty before allocating credit or trading status.
C) Transactions should be handled in accordance with the regulator's dealing rule book.
D) Access to systems internally and at the client interface must be strictly controlled by the dealers.

Question

Quizplus · Accepted Answer

The Model Code recommends that liquidity providers be aware of reputational risks associated with supplying liquidity for onward third party consumption.

Answer: D
 The Model Code recommends that access to systems be strictly controlled by dealers, both internally and at the client interface.

Option B is incorrect because the Model Code requires market participants to seek information as to the legal status of a potential counterparty before allocating credit or trading status, and Option C is incorrect because the Model Code's recommendations regarding the handling of transactions are not limited to the regulator's dealing rule book.

Which of the Following Correctly States the Model Code's Recommendations