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Series 7: Seeks Business for the Broker-Dealer
Series 7 practice questioneasyReferral Compensation — Registration Requirement

A bank employee refers a customer to a broker-dealer and receives a nominal fee. What must the employee do to receive this fee legally if the fee is based on the size of the transaction?

  1. ARegister with the FDIC
  2. BRegister as a representative of the broker-dealer✓ Correct answer
  3. CObtain a loan officer license
  4. DNo registration is required
Explanation

Why BRegister as a representative of the broker-dealer

If the referral compensation is transaction-based, the bank employee must be registered as a representative of the broker-dealer.

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