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?
- ARegister with the FDIC
- BRegister as a representative of the broker-dealer✓ Correct answer
- CObtain a loan officer license
- DNo registration is required
Explanation
Why B — Register 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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