Which of the following is true about registered representative's relatives?

Which of the following is true about registered representative's relatives?

• A. All relatives can purchase IPOs
• B. Only immediate family can purchase IPOs
• C. Cousins are included in immediate family
• D. None are permitted to purchase IPOs

Answer: (B)

The correct answer highlights that only immediate family members of registered representatives are allowed to purchase Initial Public Offerings (IPOs). This guideline is primarily designed to prevent conflicts of interest and ensure fair access to investment opportunities. In this context, immediate family typically includes parents, siblings, spouses, and children. This regulation reflects the broader regulatory framework that aims to promote fair trading and mitigate the risk of preferential treatment for relatives of individuals working in the financial sector. The other choices suggest broader access to IPOs, which does not align with this regulatory intent—allowing all relatives or including cousins would not address the goal of maintaining market integrity and fairness. In sum, the restriction to immediate family helps to prevent potential abuses or perceptions of favoritism in the allocation of IPO shares.

The correct answer highlights that only immediate family members of registered representatives are allowed to purchase Initial Public Offerings (IPOs). This guideline is primarily designed to prevent conflicts of interest and ensure fair access to investment opportunities. In this context, immediate family typically includes parents, siblings, spouses, and children.

This regulation reflects the broader regulatory framework that aims to promote fair trading and mitigate the risk of preferential treatment for relatives of individuals working in the financial sector. The other choices suggest broader access to IPOs, which does not align with this regulatory intent—allowing all relatives or including cousins would not address the goal of maintaining market integrity and fairness. In sum, the restriction to immediate family helps to prevent potential abuses or perceptions of favoritism in the allocation of IPO shares.