On May Day, May 1, 1975, which event occurred?

On May Day, May 1, 1975, which event occurred?

• A. SIPC insurance fund was established
• B. The Glass-Steagall Act was repealed
• C. ERISA was enacted into law
• D. Fixed rate commissions were abolished

Answer: (D)

The main idea is a landmark regulatory shift in the securities industry: moving from fixed to negotiated commissions. On May 1, 1975, the major exchanges and the NASD ended fixed-rate brokerage commissions, allowing brokers to set rates through negotiation with clients. This ended a long-standing practice where commissions were uniform across firms, and it opened up price competition and greater pricing flexibility for investors. This is why the option describing the abolition of fixed rate commissions is correct. The other events happened in different contexts or times: the SIPC insurance fund has its roots in earlier legislation from 1970, not 1975; the Glass-Steagall Act was repealed much later, in 1999; and ERISA became law in 1974.

The main idea is a landmark regulatory shift in the securities industry: moving from fixed to negotiated commissions. On May 1, 1975, the major exchanges and the NASD ended fixed-rate brokerage commissions, allowing brokers to set rates through negotiation with clients. This ended a long-standing practice where commissions were uniform across firms, and it opened up price competition and greater pricing flexibility for investors.

This is why the option describing the abolition of fixed rate commissions is correct. The other events happened in different contexts or times: the SIPC insurance fund has its roots in earlier legislation from 1970, not 1975; the Glass-Steagall Act was repealed much later, in 1999; and ERISA became law in 1974.