A registered representative may not engage in any private securities transactions without first obtaining the broker dealer’s prior approval. The registered representative must provide the employing firm with all documentation regarding the investment and the proposed transaction. An example of a private securities transaction would be if a representative helped a start-up business raise money through a private placement. If the representative is going to receive compensation, the employing member firm must supervise the transaction as if the firm itself executed the transaction. If a representative sells investment products that the employing member does not conduct business in, without the member’s knowledge, then the representative has committed a violation known as selling away.





Customer Complaints

Related Articles
  1. Managing Wealth

    How To Invest In Private Companies

    It can be tough to invest in a company that doesn't trade on an exchange, but there are also several advantages.
  2. Investing

    What Are Transaction Costs?

    Transaction costs are expenses incurred from buying or selling securities.
  3. Small Business

    How To Invest In Private Companies

    Owning a private firm means sharing more directly in the underlying firm’s profits.
  4. Financial Advisor

    What Financial Advisors and Brokers Need to Know About Rule 407

    Learn about NYSE Rule 407 and how it may impact you as a financial advisor or investment broker. What you don't know about this regulation can hurt you.
  5. Insurance

    A Primer On Private Equity

    Private equity investing is becoming more accessible for individual investors; find out how you can get involved.
  6. Insurance

    Brokerage Functions: Underwriting And Agency Roles

    Learning about these various activities can give insight into how securities are issued and traded.
  7. Financial Advisor

    FINRA Rule 2273: Your Recruiting Questions Answered

    An in-depth look at and Q&A on FINRA's new recruiting practices rule, which goes into effect in November.
  8. Managing Wealth

    Private Equity Fundamentals

    Investopedia explains what private equity is through a concise video.
  9. Investing

    Understanding Related-Party Transactions

    In business, a related-party transaction refers to a transaction where parties on both sides have a common interest or relationship.
  10. Investing

    Valuing Private Companies

    Even though they’re typically not accessible to the average investor, private firms often raise money through venture capital or private equity investments.
Frequently Asked Questions
  1. No results found.
Trading Center