Packaged Securities - Compliance
This is an important topic because investment companies are considered the instrument of choice for the least sophisticated, and therefore most vulnerable, investors. Investment company distributions must comply with far more oversight than those of any other form of security.
- Neither you as a registered representative nor your firm can accept any special gift, prize or any other consideration (beyond a standard 7% sales charge and a free lunch) that might give you the incentive to sell the funds of one mutual fund over another.
- Further, your firm cannot buy shares of a mutual fund on its own account in the expectation that the share price will rise. Mutual fund shares can only be purchased to fill an immediate order from a client.
- There is another restriction on your activities relative to how you sell mutual fund shares: the fund sets the share price. You cannot take a smaller commission, discount the selling price, and take market share away from a competitor. That sort of race-to-the-bottom is frowned upon by the SEC.
The following table summarizes the differences among closed-end funds, mutual funds, UITs and hedge funds:
|IPO||Exchange-traded||SEC-regulated||Price setter||Redeemable||Investment Advisor|
|Hedge||Yes or no||No||No||NAV||Yes||No|
BrokersIndependent broker-dealers are a great choice for experienced, self-starter planners who have established practices.
Personal FinanceRIAs and brokers are held to different standards when providing investment advice. Here's how they differ.
Trading Systems & SoftwareLaunching your own broker-dealer is a lot of work, but the potential payoff is great, both personally and financially.
ProfessionalsLearn how to answer option questions on the Series 7 exam. Pass your Series 7 exam with the help of these tips.
ProfessionalsFINRA Series 55 Exam Guide
ProfessionalsFINRA Series 62 Exam Guide
ProfessionalsFINRA/NASAA Series 99 Exam Guide
ProfessionalsFINRA/NASAA Series 65 Exam Guide
ProfessionalsFINRA Series 6 Exam Guide
ProfessionalsFINRA/NASAA Series 63 Exam Guide
- No results found.
The Financial Industry Regulatory Authority (FINRA) offers a variety of licenses that must be obtained before conducting ... Read Full Answer >>