Chapter 8 - Compensation Flashcards

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1
Q

Must communicate in writing if an IA or IAR is receiving compensation that

A
  • is receiving fees, comp, commiss that is in addition to those previously communicated to the client
  • is charging an advisory fee in addition to a commission, or vice versa
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2
Q

BDs and agents can’t charge for ________ duties

A

miscellaneous

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3
Q

BDs and agents can’t split or pay commissions to persons who are not _____ to sell that particular type of security

A

licensed

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4
Q

Can’t split commissions with any agents that don’t work for the same ______ or a _____ under _____ control

A

BD, or a BD under common control

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5
Q

“Soft dollar” arrangements are limited to:

A
  • research publications
  • electronic services that provide market data
  • software that assist in investment analysis
  • seminars for agents and reps on work-related topics
  • custodial and clearing services
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6
Q

“Soft dollar” arrangements CANNOT be

A
  • overhead related expenses, such as office space, admin labor or furniture
  • compensation for referrals
  • salaries
  • cell phones or computers
  • anything that benefits the adviser but not the clients
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7
Q

IAs who receive soft dollar services from BDs for using them to execute trades must ______ this to clients

A

disclose

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8
Q

An IA can’t pay cash to a 3rd party for soliciting clients UNLESS

A
  • solicitor has not been subject to SEC sanctions
  • no felonies or misdemeanors in last 10 years
  • no willful violation of securities law
  • agreement between IA and 3rd party is in writing
  • client must get IA brochure and separate solicitor disclosure
  • client must sign that they have received IAs brochure and solicitor disclosure
  • IA is responsible for supervising solicitor
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