SEC Rule 10b-10: Confirmation Delivery Deadline and Mandatory Disclosures
Under SEC Rule 10b-10, by what deadline must a broker-dealer deliver a written trade confirmation to a customer, and what capacity disclosure must be included?
Confirmations must be delivered at or before trade completion (settlement date) and must disclose whether the firm acted as agent (broker charging commission) or principal (dealer with markup/markdown).
Complete Analysis & Legal Rationale
Under SEC Rule 10b-10, a broker-dealer must send written confirmation of every securities transaction to the customer at or before the completion of the transaction (typically the settlement date). Mandatory confirmation contents include: (1) Trade date and settlement date; (2) Identity and quantity of the security; (3) Execution price; (4) Capacity: whether the firm acted as AGENT for the customer (disclosing commission) or as PRINCIPAL for its own account (disclosing markup or markdown on principal trades); and (5) Control relationships or payment for order flow.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Confirmations must be delivered at or before trade completion (settlement date) and must disclose whether the firm acted as agent (broker charging commission) or principal (dealer with markup/markdown).
Fails to adhere to trade execution and settlement rules regarding B.
Fails to adhere to trade execution and settlement rules regarding C.
Fails to adhere to trade execution and settlement rules regarding D.
Official Standard: Under SEC Rule 10b-10, a broker-dealer must send written confirmation of every securities transaction to the customer at or before the completion of t