Final answer:
The employing broker-dealer must be given written notification of a planned private securities transaction with compensation. They then have the opportunity to approve or disapprove the associated person's participation.
Step-by-step explanation:
When a registered representative plans to enter into a private securities transaction for which they may receive compensation, the rules require that the individual provide prior written notification to their employing broker-dealer. Upon receiving this notification, the employing broker-dealer will have the opportunity to approve or disapprove of the associated person's participation in the proposed transaction. It is not inherently within the rules that the broker-dealer should require a compensation split, nor is it their duty to provide execution services for the transaction unless they decide to approve and thus take responsibility for it.
In the context of private securities transactions, registered representatives are obligated to give advance written notice to their employing broker-dealer if they intend to engage in such transactions, particularly when compensation is involved. This notification allows the broker-dealer to assess and either approve or disapprove of the representative's participation in the proposed transaction. It is not explicitly mandated by the rules for the broker-dealer to stipulate a compensation split, and they are not automatically obliged to provide execution services unless they decide to approve and assume responsibility for the transaction. This regulatory framework ensures transparency and provides the broker-dealer with the opportunity to oversee and manage potential conflicts of interest while preserving the integrity of the securities industry.