A registered representative at a member firm plans to take on a weekend role as a compensated real estate agent for a local agency, independent of broker-dealer operations and without involving existing securities clients. Under FINRA Rule 3270, which of the following actions must the representative take prior to engaging in this activity?
- Provide prior written notice to the employing broker-dealer in the form specified by the firm.Cevap
- BObtain written authorization from FINRA and the state real estate regulatory commission.
- CSubmit a formal filing that initiates a mandatory 2-year cooling-off period before receiving compensation.
- DNo disclosure is required because real estate transactions do not involve investment securities or firm clients.
Cevap
The registered representative must provide prior written notice to the employing member firm prior to engaging in the compensated outside business activity.
Under FINRA Rule 3270, any registered person proposing to engage in business activities outside the scope of their employment with a member firm for which they are compensated (or expect compensation) must provide prior written notification to the firm in the form required by the firm. This allows the employing firm to analyze potential conflicts of interest, customer confusion, or supervisory burdens.
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Outside Business Activities (OBA) Disclosure Requirements under FINRA Rule 3270