Question of the Week

Under the Uniform Securities Act, which of the following actions is permitted for a registered sales representative?

a) Make trades in a state where the sales representative is registered, but the broker-dealer is not.
b) Make trades in a state where the sales representative is not registered, as long as the broker-dealer is registered in that state.
c) Solicit trades for non-exempt unregistered securities, as long as the sales representative is registered in the state.
d) Offer investment advisory services as long as no separate fee is charged and the services are incidental to his or her brokerage services.

Answer:

The correct answer is d).

A sales representative may not make trades in a state unless both the sales representative and the broker-dealer are registered in the state. In addition, they may not solicit trades for non-exempt unregistered securities, (although it is permitted for unregistered exempt securities such as municipal bonds).

A sales representative is permitted to provide investment advisory services, as long as no separate fee is received and the services are incidental to the brokerage services.


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