Trading, Accounts & Prohibited ActsQuestion 262 of 398
A firm mixes customer securities with the firm's own securities in a way that puts customer assets at risk if the firm fails. This prohibited practice is called:
a.Netting
b.Rehypothecation disclosure
c.Commingling
d.Subordination
Explanation
Commingling improperly mixes customer funds or securities with those of the firm, endangering customer property. Rules such as the SEC's customer protection rule require firms to segregate and safeguard customer assets.
Law Reference: Securities Exchange Act of 1934Practice all 398 questions free — no signup required.
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