Which statement is true about MMs and agent traders?

Which statement is true about MMs and agent traders?

• A. They cannot operate in non-financial sectors.
• B. They are securities dealers for the purposes of the law, even if not primarily in financial sector
• C. They are exempt from SESTA requirements
• D. They are only allowed to trade in the primary market

Answer: (B)

Market activity defines regulatory status here: market makers and agent traders are engaged in buying and selling securities as a ongoing business, so they’re treated as securities dealers under the law regardless of what sector their parent company operates in. That means they’re subject to the same dealer-related requirements and obligations as others who legally function as dealers, even if their primary business isn’t financial. So the correct statement reflects this broad definition: these roles are securities dealers for legal purposes, no matter how faded the line is with non-financial work. The other options don’t fit because a dealer can operate in non-financial sectors, there isn’t an exemption from regulatory requirements like SESTA, and dealers can trade in both primary and secondary markets, not only in the primary market.

Market activity defines regulatory status here: market makers and agent traders are engaged in buying and selling securities as a ongoing business, so they’re treated as securities dealers under the law regardless of what sector their parent company operates in. That means they’re subject to the same dealer-related requirements and obligations as others who legally function as dealers, even if their primary business isn’t financial.

So the correct statement reflects this broad definition: these roles are securities dealers for legal purposes, no matter how faded the line is with non-financial work. The other options don’t fit because a dealer can operate in non-financial sectors, there isn’t an exemption from regulatory requirements like SESTA, and dealers can trade in both primary and secondary markets, not only in the primary market.