Sec
On a trade confirmation, what must be disclosed when a broker-dealer acts as AGENT for the customer?
Agent = commission disclosed. Principal = mark-up/mark-down (different rules apply).
Complete Analysis & Legal Rationale
When a broker-dealer acts as agent (executing trades on behalf of the customer), the commission amount must be disclosed on the confirmation. When acting as principal (trading from the firm's inventory), different disclosure rules apply for mark-ups and mark-downs.
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:
Profit margin is not disclosed - only the commission for agency trades.
Matches the verified teaching point in the explanation.
Inventory position is relevant for principal trades, not agency trades.
Market maker's spread is not required to be disclosed on customer confirmations.
Official Standard: Customer confirmation disclosure 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.