Series 79 practice questionmediumFINRA Rules Applicable to Investment Banking
Under FINRA Rule 5110, what type of compensation must be disclosed and subject to limitations when participating in a public offering?
- AAny item of value received from the issuer, including reimbursement of expenses✓ Correct answer
- BOnly cash underwriting fees
- CTravel expenses under $5,000 per trip
- DPrincipal payments received from unrelated debt transactions
Explanation
Why A — Any item of value received from the issuer, including reimbursement of expenses
All items of value—including reimbursements—must be disclosed and are subject to Rule 5110 limits. The trap is overlooking non-cash items or small expense reimbursements.
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