Investment Company and. Variable Contracts Products Principals (Series 26) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Study for the Series 26 exam with flashcards and multiple choice questions. Each question includes hints and detailed explanations to help you understand and master the material needed to pass your exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What defines how an Ex-Date for Closed-End Investment Companies is set?

By the Board of Directors
By the SEC
By the SRO
By the investors

The correct answer is: By the SRO

The Ex-Date, or Ex-Dividend Date, for Closed-End Investment Companies is determined by the Self-Regulatory Organization (SRO) overseeing the market where the shares are traded. This date is crucial as it establishes when new buyers of the shares will not be entitled to receive the upcoming dividend distribution. The SRO sets the Ex-Date in accordance with regulations that help maintain fair trading practices and ensure that all market participants have consistent information regarding dividend entitlement. This process is vital for maintaining orderly markets and ensuring compliance with established rules governing securities transactions. Unlike the other choices, which might suggest a role of the Board of Directors or individual investors in determining the timing of the Ex-Date, the SRO provides a standardized approach that helps avoid discrepancies and protects investors' rights in the broader securities market.