It is now permissible in most markets for brokers to be owned by banks and other principals. Where there is shared management, or a share holding or other investment in a broker by a counterparty:
A) The broker is not obligated to reveal the connection provided Chinese Walls are in place.
B) The broker is not obligated to reveal the connection in the professional market.
C) The broker should advise the other counterparty of the connection.
D) The matter is covered in the Model Code.

Question

Quizplus · Accepted Answer

The broker should advise the other counterparty of the connection to ensure transparency and avoid any conflict of interest. This is in line with ethical standards and good business practice. Chinese Walls are not sufficient to completely eliminate the potential for conflicts of interest, so disclosure is necessary. While the matter may be covered in the Model Code, it is still important for brokers to act in good faith and disclose any potential conflicts of interest to their clients.

It Is Now Permissible in Most Markets for Brokers to Be