To protect consumers, the SEC requires brokers and dealers to disclose which of the following about securities?

• A. Only positive information
• B. Personal opinions
• C. Material information
• D. Confidential client data

Answer: (C)

Verified step by step guidance

1. Understand the role of the SEC (Securities and Exchange Commission): The SEC is responsible for protecting investors, maintaining fair and efficient markets, and facilitating capital formation. It ensures transparency and fairness in securities transactions.
2. Define 'material information': Material information refers to any information that a reasonable investor would consider important in making an investment decision. This includes financial performance, risks, and other factors that could influence the value of a security.
3. Recognize the importance of disclosing material information: Brokers and dealers are required to disclose material information to ensure that investors can make informed decisions. This prevents fraud and promotes trust in the financial markets.
4. Eliminate incorrect options: Positive information, personal opinions, and confidential client data are not required disclosures under SEC regulations. Positive information and personal opinions may be biased, and confidential client data is protected by privacy laws.
5. Conclude that the correct answer is 'Material information': This aligns with the SEC's goal of ensuring transparency and protecting investors by providing them with relevant and accurate information about securities.