General Securities Sales Supervisor (Series10) Practice Exam

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A customer places a sell order but receives execution information that is incorrect. What should the representative explain to the customer?

The trade was executed as reported
The firm is obligated to honor the erroneous reporting
The transaction represents a reporting error, not an execution error
The customer can keep the reported amount

The correct answer is: The transaction represents a reporting error, not an execution error

When a customer receives execution information that is incorrect, the representative should clarify that the situation reflects a reporting error rather than an execution error. This distinction is crucial because it indicates that while the information provided about the trade may be inaccurate, the actual transaction was processed as intended based on the original order. Understanding this distinction helps in managing the customer's expectations and clarifying the nature of the error. It provides the customer with insight into the operations of the firm and reinforces the integrity of the execution process. Reporting errors do not typically affect the transaction itself; rather, they involve inaccuracies in the communication of the trade details after execution. This context is important in maintaining customer trust and providing transparency about how trade processing and reporting functions within a brokerage environment.