Under which circumstances can a dealer member have a control position in a company?

• A. When they hold less than 20% voting stock
• B. When they own a significant percentage of voting stock
• C. When they are acting on behalf of a private client
• D. When they have purchased shares solely for investment purposes

Answer: (B)

A dealer member can have a control position in a company primarily when they own a significant percentage of voting stock. This is because owning a substantial amount of voting shares typically gives the dealer member the ability to influence or make decisions regarding that company's operations, governance, and policies. This control is not merely about the quantity of shares owned but also about the capacity to exert influence over the company's strategic decisions.

When a dealer member reaches a certain threshold of ownership, it indicates a level of commitment and interest in the company's direction. This situation must be managed within regulatory frameworks to ensure that it does not lead to conflicts of interest or abuse of power.

In contrast, holding less than 20% voting stock would not generally constitute a control position, as it usually does not provide sufficient power to influence company decisions. Similarly, acting on behalf of a private client or purchasing shares solely for investment purposes does not inherently confer control over the company, as those actions are typically considered in the context of client service or investment strategy rather than direct control or influence over corporate governance.