Final answer:
The statement that does not apply when a registered representative is sharing in profits and losses with a customer is that such sharing can occur without the necessary written authorizations. Sharing arrangements must conform to regulatory guidelines which include written customer and broker-dealer consent.
Step-by-step explanation:
If a registered representative is sharing in profits and losses with a customer, all of the following statements apply except one. Generally, sharing in profits and losses is tightly regulated, and the registered representative must adhere to strict guidelines. One of the exceptions would be if the representative does not have written authorization from the customer and the broker-dealer with which the representative is associated; this is required for sharing in client accounts.
The reference information provided about the sale of corporate stock and proprietary colonies does not apply directly to the question being asked about sharing profits and losses in a customer account. When discussing stocks, the important concept is that the transaction usually occurs between current owners, not between the buyer and the company that originally issued the stocks. In the case of a proprietary colony, proprietors had responsibilities beyond just collecting profits, which requires an understanding of historical governance models.