Chapter 8 - Compensation Flashcards
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
2
Q
BDs and agents can’t charge for ________ duties
A
miscellaneous
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
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
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
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
7
Q
IAs who receive soft dollar services from BDs for using them to execute trades must ______ this to clients
A
disclose
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