Series 10 Practice Exam 2025 – Complete Guide for Securities Sales Supervisor Prep

When a broker-dealer is a bona-fide Registered Reporting Market Maker, they have specific privileges when it comes to handling customer orders to sell stock under Rule 144. The ability to buy the stock into their own inventory is significant because it allows the market maker greater flexibility in managing their book while ensuring liquidity in the market.

In the context of Rule 144, which governs the sale of restricted and control securities, a market maker can facilitate the sale by acting both as a market maker and as a dealer. This means that rather than simply acting as an intermediary in the transaction, the market maker can purchase shares from the selling customer directly into their own inventory, as well as sell them back into the market later. This is particularly advantageous in providing liquidity and maintaining smooth market operations.

Additionally, the exemption associated with Rule 144 allows market makers to engage in these transactions without the restrictions that may apply to other types of broker-dealers, thereby enhancing their role and function in the trading ecosystem.

Therefore, the statement that the firm is allowed to buy the stock into its own inventory accurately reflects the rules governing the activities of bona-fide Registered Reporting Market Makers under Rule 144.