What are dealers required to do according to IIROC Rule 2800B?

• A. Negotiate commissions on behalf of clients
• B. Establish guidelines for commissions and pricing of securities
• C. Reduce trading frequency to limit market volatility
• D. Provide clients with all potential risks before trading

Answer: (B)

The requirements outlined in IIROC Rule 2800B emphasize the necessity for dealers to establish guidelines for commissions and pricing of securities. This rule seeks to ensure that dealers maintain a fair and transparent approach to their pricing structures and the commissions they charge clients. By creating clear guidelines, dealers can help clients understand the costs associated with trading and investment decisions.

Establishing these guidelines is crucial for protecting clients' interests, as it promotes consistency within the trading environment. It allows dealers to operate with integrity and enhances regulatory oversight, ensuring that clients are not facing arbitrary or unjust pricing practices.

The other options focus on different aspects of dealer activity, such as negotiating commissions or reducing trading frequency, but they do not capture the specific requirement set forth in Rule 2800B regarding the establishment of clear guidelines. Providing clients with all potential risks is important in the context of compliance and suitability but is not directly tied to the core requirement of setting pricing and commission structures.