SIE practice questioneasyOutside Business Activities
A registered representative wants to work part-time as a real estate agent. What must the representative do?
- AObtain written approval from FINRA directly
- BNothing, as real estate is unrelated to securities
- CResign from the broker-dealer before engaging in outside business
- DProvide prior written notice to the employing broker-dealer✓ Correct answer
Explanation
Why D — Provide prior written notice to the employing broker-dealer
FINRA Rule 3270 requires registered persons to provide prior written notice to their employing member firm before engaging in any outside business activity (OBA), whether or not it is securities-related. The firm then evaluates whether the activity creates potential conflicts of interest or other concerns. The firm may impose conditions, require the activity to be supervised, or prohibit it entirely. Real estate, insurance, and accounting are common examples of OBAs that must be disclosed.
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