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 analyze a company that doesn't trade publicly, but there are several advantages.
  2. Trading

    Principal Trading and Agency Trading

    Ever wonder what happens behind the scenes when you buy or sell a stock? Read on to find out.
  3. Financial Advisor

    On The Record: Communications With The Public

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

    What Advisors Need to Know About Rule 3210

    Here's what advisors and brokers need to know about FINRA Rule 3210.
  5. 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.
  6. Personal Finance

    Not Every Financial Advisor Gives Impartial Advice

    Some financial advisors provide advice that benefits them rather than you.
  7. Tech

    Bitcoin Transactions Vs. Credit Card Transactions

    We provide an overview of the differences between bitcoin and credit card transactions, and the advantages of using one over the other.
  8. Investing

    What is private equity?

    Although few people actually understands the industry, private equity (PE) has gained a great amount of influence in today's financial marketplace. Check out what it is and how it operates.
  9. Investing

    How to Invest in Private Equity

    Private equity might be a pricey investment, but the payoff could be big. Here's why and where you should invest in private equity.
Frequently Asked Questions
  1. What is the difference between gross profit margin and net profit margin?

    Gross profit margin and net profit margin are two separate profitability ratios used to assess a company's financial stability ...
  2. What's The Formula For Calculating Free Cash Flow?

    Free cash flow is the cash left over after a company pays for its operating expenses and capital expenditures. High free ...
  3. What are soft dollars?

    The term 'soft dollars' refers to mutual funds making in-kind payments to their service providers; for instance, by passing ...
  4. What are Vanguard's Admiral Shares?

    Learn about Vanguard Admiral Shares – a separate class of shares for mutual funds – with lower fees and a higher required ...
Trading Center