Sales Activities - FINRA Conduct Rule 2420
Dealing with Non-Members
This rule requires that representatives deal with any non-member (someone not affiliated with a broker-dealer) the same as they would anyone in the general public. In essence, a representative cannot offer a discount or share commissions with anyone who is not affiliated with a broker-dealer. This includes the purchase or sale of any security on any terms other than those available to anyone else. Activities prohibited under this rule include:
- Allowing or granting to any non-member broker or dealer any selling concession, discount or other allowance allowed by such member to a member of a registered securities association and not allowed to a member of the general public, in any transaction with such non-member broker or dealer.
Joining with any non-member broker or dealer in any syndicate or group contemplating the distribution to the public of any issue of securities
- Selling any security to or buying any security from a non-member broker or dealer except at the same price at which, at the time of such transaction, such member would buy or sell such security, from or to a person who is a member of the general public not engaged in the investment banking or securities business
|Exam Tips and Tricks
Be sure to know that members cannot offer a better price on a security to a nonmember firm than to anyone in the general public.
comments powered by Disqus