Question

Which statement accurately describes the required disclosure when a brokerage represents multiple sellers or buyers in the same transaction?

A) The disclosure should be made orally before the transaction.
B) The disclosure must be in writing before an order is placed, regardless of client or customer relationships.
C) The disclosure is not mandatory if there's no conflict of interest.

Select the correct option based on the given information:

A only
B only
C only

Answer 1

The required disclosure when a brokerage represents multiple buyers and sellers in the same transaction must be in writing before an order is placed to ensure transparency and informed decision-making.

Step-by-step explanation:

The statement that accurately describes the required disclosure when a brokerage represents multiple buyers and sellers in the same transaction is the following: the disclosure must be in writing before an order is placed, regardless of client or customer relationships. This is essential to maintain transparency and it helps to ensure that all parties are well-informed and there is no conflict of interest. Furthermore, this practice allows buyers and sellers to act independently and compete with each other, while being well informed of the conditions in the markets. Additionally, it ensures that both buyers and sellers can enter into and leave the market whenever they choose, maintaining market fluidity.