What should be done if a broker fails to conclude a transaction at the quoted price and the dealer has to accept a lesser quote to neutralize his risk?
A) 'stuff' the broker and insist on a replacement name at the original price
B) accept a bank transfer compensation payment in favour of the bank or adjustment to brokerage bills
C) refuse any sort of compensation from the broker for the amount concerned
D) acknowledge the excuses of the broker and accept his offer of entertainment in compensation for the failed transaction

Question

Quizplus · Accepted Answer

Accepting a compensation payment in favor of the bank or adjustment to brokerage bills is the appropriate solution. Refusing compensation will not mitigate the dealer's risk, and 'stuffing' the broker or accepting entertainment as compensation is unethical and could lead to legal issues.

What Should Be Done If a Broker Fails to Conclude