Final answer:
A former registered person from the securities industry may only receive commissions from their old firm if there is a pre-existing contract that specifically allows for such continued payment after departure. Each firm's policies and the details in the contract will dictate the permissibility and structure of any ongoing commissions.
Step-by-step explanation:
When a registered person leaves the securities industry for a job in another sector, such as manufacturing, there are certain considerations regarding the receipt of commissions from their old firm. Generally, a registered person may not continue to receive commissions simply based on prior activities or relationships with clients. There are, however, exceptions where this might be permissible:
- A contract signed between the registered person and the firm before the person's departure may stipulate continuing payment of commissions for a period of time or for certain deals that were initiated while the person was still employed at the firm.
- A commission structure specified in a contract might be devised to continue paying commissions post-employment, though this would be determined at the time of the contract signing and is not a standard practice without such an agreement.
- Moreover, the contract may include terms for continuing commissions to be paid to a spouse or estate in the event of the person's death, although this is a specific provision and not universally required.
Each firm will have its own policies and contractual agreements that govern these situations. It is crucial for registered individuals to understand and negotiate these terms before leaving the firm if they wish to secure such an arrangement.