General Securities Sales Supervisor (Series10) Practice Exam

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What requirement is placed on issuers under SEC Rule 10b-18 regarding market transactions?

Must be executed at prices higher than current bids
Must be made through at least 3 brokers on any single day
Cannot be executed within 10 minutes of market open
Must be effected through one broker/dealer on any given day

The correct answer is: Must be effected through one broker/dealer on any given day

The requirement placed on issuers under SEC Rule 10b-18 is that they must effectuate their repurchase transactions through one broker/dealer on any given day. This rule was established to provide a safe harbor for issuers conducting public repurchase activities, aiming to prevent manipulative practices that could distort the market. By limiting repurchases to a single broker or dealer, the rule helps ensure that such transactions do not artificially inflate stock prices through coordinated trading. This single broker/dealer provision reduces the potential for market manipulation and creates a more transparent trading environment, as transactions through multiple brokers could create confusion or irregular trading patterns. The other options suggest requirements that do not align with the provisions of SEC Rule 10b-18. The rule does not mandate specific price levels for transactions or timing restrictions concerning the market opening while allowing trades to occur throughout the trading day as long as they are compliant with the outlined guidelines.