What service does a carrying broker provide to another dealer?

What service does a carrying broker provide to another dealer?

• A. Investment advice
• B. Back office services
• C. Asset management
• D. Market analysis

Answer: (B)

A carrying broker provides essential back office services to another dealer, which is crucial in supporting their trading activities. This includes handling the processing of transactions, maintaining records, and managing the settlement of trades. By outsourcing these back office functions, a dealer can focus more on client relationships, market analysis, and strategic decision-making rather than the operational complexities involved in transaction settlements and compliance tasks.

This service is particularly important in ensuring that all trades are accurately executed and that the necessary documentation and regulatory compliance are maintained. The carrying broker acts as a facilitator, allowing other dealers to operate more efficiently and effectively within the financial markets. While investment advice, asset management, and market analysis are services that could be offered by other financial professionals, they do not align with the core function of a carrying broker's role in streamlining and supporting operational processes for another dealer.