Primary Market
The portion of the underwriter's spread that is paid to the dealer who actually sells the securities to investors is called the:
The selling concession is the portion of the spread paid to the firm that actually sells the securities to investors. The manager's fee goes to the lead underwriter, the underwriting fee compensates syndicate members for
Complete Analysis & Legal Rationale
The selling concession is the portion of the spread paid to the firm that actually sells the securities to investors. The manager's fee goes to the lead underwriter, the underwriting fee compensates syndicate members for underwriting risk, and the reallowance goes to non-syndicate dealers.
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:
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
Official Standard: Governs options accounts, approvals, and related supervisory requirements (verify current text).
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.