Which rule focuses on managing systemic risk in financial markets?

The correct answer highlights the focus on managing systemic risk in financial markets through net capital rules. Net capital rules are designed to ensure that broker-dealers maintain sufficient liquid capital to meet their financial obligations. This is particularly important in the context of systemic risk, as a failure in one institution can potentially lead to a cascading effect throughout the financial system. By requiring firms to maintain a certain level of net capital, these regulations help to promote stability and confidence within the markets, reducing the likelihood of insolvency during periods of financial stress.

This regulatory framework ensures that firms can absorb losses and continue operations without posing a threat to the overall market stability. By setting these capital requirements, regulators aim to mitigate systemic risks that arise from the interconnectedness of financial institutions and to prevent situations that could lead to a broader financial crisis.

In contrast, the other aspects listed, such as regulations on investment performance, sales practice rules, and trading regulations, primarily focus on enhancing fairness, transparency, and ethical standards within transactions, rather than specifically targeting systemic risk management. Therefore, net capital rules stand out as directly aimed at reinforcing the resilience of the financial system under challenging conditions.