Chapter 04 · Section 4.1
Traders Rules
Which of the following rules apply to the kind of trades floor brokers and floor traders in the commodity/futures system (e.g. on CME) may perform?
a) Floor brokers may only buy from and sell to their own customers, while floor traders may trade with any counterpart.
b) Floor brokers may trade with any counterpart, whereas floor traders may only buy from and sell to other floor traders and floor brokers, but not customers.
c) Floor brokers may act on behalf of others whereas floor traders may only trade for their own accounts.
d) Members may act both as floor brokers or floor traders. However, when acting a broker, a member may not buy from, or sell to his/her own customer but must announce the customers bid/ask to the trading crowd.
The commodity/futures system is fairly liberal as far as double function is concerned.
Which of the above deals with the most important conflict of interest with regard to relationship with the customer?