The Model Code recommends that standard terms and conditions be used in legal documents. Which one of the following statements is correct?
A) When trading in financial products described by the Model Code, dealers and voice brokers need not clarify whether they propose to use standard terms.
B) Standard terms and conditions should be signed bilaterally by senior management of both principals before any applicable market transactions are entered into.
C) When using legal agreements any proposed modifications or choices offered in the agreement must be clearly stated as soon as the trade is agreed.
D) For many instruments, standard master agreements issued by recognized authorities need not be signed by senior management of the principals intending to transact business.

Question

Quizplus · Accepted Answer

According to the Model Code, standard terms and conditions should be signed bilaterally by senior management of both principals before any applicable market transactions are entered into. This ensures that all parties involved are aware and agree to the terms of the agreement. Option A is incorrect as dealers and voice brokers are required to clarify whether they propose to use standard terms. Option C is incorrect as any proposed modifications or choices offered in the agreement must be clearly stated before the trade is agreed. Option D is incorrect as standard master agreements issued by recognized authorities should be signed by senior management of the principals intending to transact business.

The Model Code Recommends That Standard Terms and Conditions Be