A question we are asked quite frequently by our clients is what activities a non-registered employee can conduct on behalf of the broker dealer.
Any employee who has not passed a qualifying exam with FINRA, including administrative assistants and a Registered Representative’s secretary, can not engage in the following activities:
- Provide advice to clients, in any form;
- Solicit new clients – or solicit an order or new business of any kind from existing clients;
- Answer investment-related client questions; or
- Act in any capacity other than a clerical role when it comes to transmitting customer funds, orders, or applications.
An employee who is not registered with a firm cannot receive any commissions, success fees or securities based compensation from transactions. NASD Rule 1042 also states that the compensation that can be paid to a non-registered administrative assistant is on an hourly or salaried basis only. The compensation cannot in any way, directly or indirectly, relate to the number or size of transactions effected for clients.
If an employee carries the Series 11 registration – Assistant Representatives – Order Processing – they are allowed to accept unsolicited securities orders from securities customers of a member firm. They may not, however, solicit transactions or new accounts on behalf of the member. Additionally, a Series 11 assistant representative may not be registered concurrently in any other capacity.
If you have any questions about the roles of unregistered personnel or when registration may be required, please contact your Compliance Partners account manager at 603-434-3594.
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