Disclosure of Transaction Costs

What this video covers

• Which two firm types, the Futures Commission Merchant (FCM) and the Introducing Broker (IB), hold the duty to disclose transaction costs to customers
• What must be disclosed: commissions, fees, and any other charges to place and carry trades
• The distinction between transparency and fee capping: honest disclosure is required, but no specific fee limit exists
• How the just-and-equitable-principles and honest-solicitation standards underpin this disclosure duty
• Why a charge arrangement intended or likely to deceive a customer about true cost violates the rules, even when the dollar amount itself would be lawful if disclosed
• How to recognize and avoid the Series 3 exam trap that falsely implies regulators cap fees or prohibit high commissions