No associated person of a member shall accept any compensation from anyone other than the member with which the person is associated. This requirement will not prohibit arrangements where a non-member company pays compensation directly to associated persons of the member, as long as:

  • The arrangement is agreed to by the member;

  • The member relies on an appropriate rule, regulation, interpretive release, interpretive letter, or "no-action" letter issued by the Commission that applies to the specific fact situation of the arrangement;

  • The receipt by associated persons of such compensation is treated as compensation received by the member for purposes of the Rules of the Association; and

  • All record keeping requirements are satisfied. Members are required to maintain records of all compensation received by the member or its associated persons from offerors. The records shall include the names of the offerors, the names of the associated persons, the amount of cash, the nature and, if known, the value of non-cash compensation received.

No member or person associated with a member shall accept any compensation from an offeror that is in the form of securities of any kind. Also, they may not directly or indirectly accept any compensation or offer any compensation other than as described in the prospectus, except under the following conditions:

  • An occasional meal, event ticket or other entertainment that is not preconditioned on achievement of a sales goal, and not excessive or frequent enough to appear improper

  • Payment or reimbursement of expenses to attend training or educational meetings offered by a member or offeror

  • Gifts that do not exceed an annual amount fixed periodically by the FINRA and that are not preconditioned on achievement of a sales goal. The current annual amount fixed by the FINRA is $100.


Introduction

Related Articles
  1. Trading

    Evaluating Executive Compensation

    Find out how to determine whether a CEO is being overpaid.
  2. Financial Advisor

    FINRA: How It Protects Investors

    Find out the history of FINRA, and how it's organized to monitor the markets and protect investors.
  3. Retirement

    How Non-Qualified Deferred Compensation Plans Work

    These tax-advantaged retirement savings plans have their pros and cons, and employers and employees must follow strict guidelines.
  4. Financial Advisor

    Investigating The Securities Police

    Learn about the history of FINRA and how this organization protects investors.
  5. Personal Finance

    5 Tech Companies With High Stock-Based Compensation (GOOGL, AMZN)

    Examine stock-based compensation among large tech firms to determine which factors are driving equity compensation and how executive grants are determined.
  6. Managing Wealth

    Benefits of Deferred Compensation Plans

    Understand the difference between a qualifying or nonqualifying deferred compensation plan. Learn about the benefits of a deferred compensation plan.
  7. Retirement

    Deferred Compensation Plans Vs. 401(k)s

    Discover the major advantages and disadvantages offered by deferred compensation plans for retirement as compared to a 401(k) plan.
  8. Taxes

    How Non-Qualified Deferred Compensation Is Taxed

    The tax savings of non-qualified deferred compensation plans are not the only tax fact you need to know before signing up for one.
  9. Financial Advisor

    On The Record: Communications With The Public

    NASD Rule 2211 can make or break your career as a registered principal.
  10. Financial Advisor

    Preparing Finances For Deployment: A Guide For Service Members

    Those who follow the instruction in this article can look forward to a homecoming of financial prosperity.
Trading Center