Which of the following is a characteristic of a Restricted Dealer?

Which of the following is a characteristic of a Restricted Dealer?

• A. Limited to mutual fund distributions
• B. Can freely engage in any form of trading
• C. Open, flexible category of registration
• D. Only deals with government securities

Answer: (C)

A Restricted Dealer is indeed characterized by having specific limitations on their activities and offerings. This means that rather than having a broad or open category of registration, they operate under stringent regulations and restrictions defined by the regulatory framework.

The open and flexible nature of the registration category for a Restricted Dealer pertains to the limitations they face in the types of products they can sell or the markets they can access. Unlike broader dealers who might have the flexibility to deal in various financial instruments, a Restricted Dealer's operations are confined to a defined scope, ensuring that they focus on particular areas that align with their compliance and regulatory guidelines.

The other options describe characteristics that do not align with what defines a Restricted Dealer. Limited to mutual fund distributions narrows down the focus but doesn’t encompass the totality of what characterizes their restrictions. Engaging freely in any form of trading contradicts the very essence of being a Restricted Dealer, as their name implies limitations. Lastly, only dealing with government securities is also too specific and does not encompass the broader restrictions that might be applicable to a Restricted Dealer. Each of these points emphasizes that while a Restricted Dealer has limitations, those do not equate to flexibility in the registration category.