Question

All of the following statements concerning an agency cross transaction for an advisory client are true EXCEPT A) an investment adviser must make prior written disclosure to the advisory client that it will act as broker-dealer for, have a potential conflict of interest with, and may collect commissions from both parties B) an advisory client must provide prior written consent for the adviser to be able to engage in agency cross transactions C) it is a transaction in which a person acts as an investment adviser in relation to a transaction in which the adviser or related person acts as a broker-dealer for both the advisory client and another person on the other side of the transaction D) an investment adviser may recommend the transaction to both parties to the transaction

Answer 1

A, B and C

Step-by-step explanation:

• Agency cross-transaction is a transaction in which a person acts as an investment adviser in connection with the transaction, in which the advisor or the concerned person acts as a broker-dealer for the advisor client and the other side of the transaction.
• The Advisor must give advance written permission to the Advisor that the Agency may conduct cross transactions as part of its action plan. The Advisor must provide in writing that the Advisor acts as a broker-dealer to the Client, may have conflicts of interest, and may collect commissions from both parties. The Advisor cannot recommend transactions to both parties.