Daily ChallengeCIREConflicts of interest and ethicsMedium

What is the primary regulatory purpose behind restricting commission payments only to individuals who are registered as an RR, IR, PM, or APM?

8 attempts · 100% correct

To ensure that all individuals receiving transaction-based compensation are subject to regulatory supervision and proficiency requirements.Correct

To simplify the tax reporting process for Dealer Members by standardizing compensation structures.

To prevent institutional clients from negotiating lower commission rates with unregistered execution desks.

To reduce the overall cost of investment services for retail clients by limiting the number of people who can be paid.

Why

Correct. Restricting payments ensures that those incentivized by commissions are qualified, supervised, and accountable to CIRO rules, protecting the integrity of the advice and trading process.

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