Final answer:
Agency cross transactions do not have to be conducted on an exchange; they can also be executed over-the-counter. These transactions involve an agent representing both the buyer and the seller in the trade.
Step-by-step explanation:
The correct answer to whether agency cross transactions have to be conducted on an exchange is B. No. Agency cross transactions, where an agent acts on behalf of both the buyer and the seller in a security transaction, do not necessarily have to be conducted on a formal exchange. They can also take place in over-the-counter (OTC) markets, where trades are conducted directly between two parties without the supervision of an exchange.
It's important to note that agency cross transactions are subject to specific regulations intended to protect client interests, ensuring fair treatment and transparency. These transactions are not mutually exclusive from other types of transactions or trading venues.