Disclosure must be made at or before confirmation of sale when there is a control relationship. Which statement correctly states when disclosure must occur?

• A. At or prior to confirmation of sale
• B. Before the order is placed
• C. After settlement
• D. Not required

Answer: (A)

Disclosures about control relationships exist to reveal potential conflicts of interest so investors can evaluate the advice and terms they’re receiving. The rule requires that this disclosure be provided at or before the confirmation of sale because the customer’s decision to proceed is being finalized at that moment. If the relationship is not disclosed until after the trade settles, the customer has already committed to the transaction without full information, which undermines fair dealing. The emphasis is on informing the customer as they finalize the purchase, either by including the disclosure on the trade confirmation or delivering it prior to confirmation.