Which rule states that orders must be executed chronologically to when they arrived, irrespective of order origin?

Which rule states that orders must be executed chronologically to when they arrived, irrespective of order origin?

• A. Prohibition of front-running and parallel running
• B. Duty of loyalty
• C. Orders must be executed chronologically to when they arrived, irrespective of whether order is client order/employee trading/dealer's own account
• D. Duty of disclosure

Answer: (C)

Time priority in order handling: orders are filled in the exact sequence they arrive, no matter who placed them. This rule ensures fairness and prevents anyone from picking off or speeding ahead of others based on origin—whether it’s a client order, an employee trade, or the dealer’s own account. In practice, when multiple orders compete at the same price, the earliest arrived gets priority, preserving an orderly and transparent market flow. Other rules cover different duties: prohibiting front-running and parallel running focuses on not using non-public information or trading actions that unfairly race against a client’s order; the duty of loyalty requires acting in the client’s best interests; the duty of disclosure centers on sharing material information. None of these specify the order-by-arrival priority rule.

Time priority in order handling: orders are filled in the exact sequence they arrive, no matter who placed them. This rule ensures fairness and prevents anyone from picking off or speeding ahead of others based on origin—whether it’s a client order, an employee trade, or the dealer’s own account. In practice, when multiple orders compete at the same price, the earliest arrived gets priority, preserving an orderly and transparent market flow.

Other rules cover different duties: prohibiting front-running and parallel running focuses on not using non-public information or trading actions that unfairly race against a client’s order; the duty of loyalty requires acting in the client’s best interests; the duty of disclosure centers on sharing material information. None of these specify the order-by-arrival priority rule.