FINRA Securities Industry Essentials Exam (SIE) SIE Question # 97 Topic 10 Discussion
SIE Exam Topic 10 Question 97 Discussion:
Question #: 97
Topic #: 10
A registered representative (RR) intends to enter into an arrangement for compensation with an unaffiliated entity to participate in the sale of promissory notes to the general public. Which of the following statements is true?
A.
This is a permissible arrangement, and the RR is only required to notify his firm.
B.
The RR must receive written approval from his firm prior to entering into this arrangement.
C.
The RR is required to notify his firm regarding this arrangement if compensation received is directly related to transactions.
D.
The RR is not required to provide prior notice to his firm as promissory notes are not considered securities.
Private Securities Transactions: Under FINRA Rule 3280, RRs must obtain written approval from their employing firm before participating in the sale of securities outside the firm.
Promissory Notes: These are typically considered securities, requiring prior approval.
Incorrect Options:
A & C: Notification alone is insufficient; written approval is required.
D: Promissory notes are generally treated as securities under federal law.
Chosen Answer:
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