Reagan has accepted a role to be the Chief Revenue Officer of a charitable organization. She is currently registered as a Dealing Representative for Sunshine Financial Services.
Which of the following would apply to her?
A.
The dealer will closely monitor her sales activities to ensure any clients from the charity are not getting a discount on potential fees.
B.
Holding both positions at the same time is a violation of securities industry rules and regulations .
C.
Reagan is not required to inform her dealer of this outside activity if none of her colleagues from the charity become clients.
D.
The regulator will limit her from providing financial services to anyone associated with the charity.
This answer is correct because according to FINRA Rule 3270, a registered representative must notify their firm in writing of any outside business activity (OBA) that involves compensation or the reasonable expectation of compensation from another person, or that may be viewed by customers or the public as part of the member’s business. However, if the OBA does not involve any of these factors, then the notification is not required. In this case, Reagan’s role as the Chief Revenue Officer of a charitable organization may not involve any compensation or any connection to her securities business, especially if none of her colleagues from the charity become clients. Therefore, she is not required to inform her dealer of this outside activity.
References = Outside Business Activities and Private Securities Transactions, Selling Away in Securities: Understanding FINRA Rule 3270
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