Question

"A registered representative at a FINRA member firm goes on the Board of Directors of a not-for-profit charity. Which statement is TRUE?"

Answer 1

The available options are:

A. This event must be reported as an Outside Business Activity to FINRA on the individual's U-4 Form

B. This event must be reported to the individual's employer

C. This event must be reported as an Outside Business Activity to both FINRA on the individual's U-4 Form and to his or her employer

D. No report is required to either FINRA or the employing member firm

Answer:

C. This event must be reported as an Outside Business Activity to both FINRA on the individual's U-4 Form and to his or her employer

Step-by-step explanation:

According to the Financial Industry Regulatory Authority, FINRA specifies that an Outside Business Activity, OBA, obliges employer authorization and must also be documented on the individual's U-4 Form. This information then goes into the registered representative's BrokerCheck report and appears as an OBA on the report.

The purpose of the OBA acknowledgment in BrokerCheck is to give a potential customer an opportunity to assess how much time a representative is dedicating to his or her business as a representative.