General Securities Sales Supervisor (Series 10) 2025 – 400 Free Practice Questions to Pass the Exam

Requiring broker-dealers to establish written policies against insider trading is primarily aimed at protecting the integrity of the financial markets. Insider trading undermines investor confidence and can lead to an uneven playing field where some market participants have access to material, non-public information that others do not. By implementing written policies, broker-dealers help to create a level playing field, thereby promoting fair and orderly markets. This integrity is vital for maintaining trust among investors and the general public, which in turn supports market liquidity and capital formation.

While compliance with federal regulations is also crucial, the ultimate goal of these regulations is the protection of market integrity. Enhancing competition and ensuring clients receive fair treatment are important aspects of the financial markets, but they stem from a foundational need to maintain integrity. If market integrity is compromised, the repercussions can ripple through the system, affecting all other facets of the market. Thus, the primary focus of such policies centers on maintaining a trustworthy and fair market environment.