Question

One of the Financial Industry Regulatory Authority (FINRA) Conduct Rules is concerned with private securities transactions. Under that rule, it would be correct to state that

A.if the member approves the registered representative participating in a transaction for compensation, it must treat the transaction as if it is being done on its own behalf by entering the transaction on its own books and supervising the associated person during the transaction.
B.as long as no compensation to the registered representative is involved, notification to the member is not required.
C.sale of a securities product to the registered representative's mother where there is only nominal compensation is not covered under the rule.
D.if the member disapproves of the registered representative's participation in a transaction for compensation, the associated person may not participate in it

Answer 1

One of the Financial Industry Regulatory Authority (FINRA) Conduct Rules states that if the member disapproves of the registered representative's participation in a transaction for compensation, the associated person may not participate in it.

Step-by-step explanation:

Under the Financial Industry Regulatory Authority (FINRA) Conduct Rules, private securities transactions are regulated and supervised to ensure fair practices in the sale of securities by brokers, dealers, and bankers. One of these rules states that if a member approves a registered representative's participation in a transaction for compensation, the member must treat the transaction as if it is being done on its own behalf by entering the transaction on its own books and supervising the associated person during the transaction.

If the member disapproves of the registered representative's participation in a transaction for compensation, the associated person may not participate in it. Therefore, option D is correct.