Finra Series-6 Exam - Topic 7 Question 73 Discussion

Actual exam question for Finra's Series-6 exam

Question #: 73
Topic #: 7

Chandler is a registered representative with GetErDone Broker-Dealers, a FINRA member-firm. His friend, Phoebe, is employed by FlyByNight Investments, which is not a member of FINRA, or any other securities association for that matter. Given these facts:

AIf Chandler executes any transactions for Phoebe, he is required to charge her the same commission that he charges any member of the general public.

BChandler is prohibited from engaging in any financial transactions with Phoebe.

CChandler is prohibited from splitting any commissions with Phoebe.

DBoth A and C are true.

Show Suggested Answer

Suggested Answer: D

Given that Chandler is a representative with a member firm while Phoebe's employer is not a member of any known securities association, he is required to charge Phoebe the same commission that he charges any member of the general public when executing a transaction for her and is prohibited from splitting commissions with her. He is not prohibited from engaging in any financial transactions with her; he simply must do so ''for the same commissions or fees, and on the same terms and conditions as are. . .accorded to the general public,'' according to FINRA.

by Daron at Mar 21, 2024, 12:38 PM

Limited Time Offer

25%

Off

Get Premium Series-6 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Salena

6 months ago

I thought non-FINRA firms had more leeway, but I guess not!

upvoted 0 times

...

Cristina

6 months ago

No way he can split commissions with her, that's a big no-no!

upvoted 0 times

...

Hubert

6 months ago

Wait, can he even do transactions with her at all?

upvoted 0 times

...

Odelia

7 months ago

Totally agree, that's how it works!

upvoted 0 times

...

Serina

7 months ago

Chandler has to charge Phoebe the same commission as anyone else.

upvoted 0 times

...

Harrison

7 months ago

I’m leaning towards B being true since Chandler works for a FINRA member and Phoebe doesn’t, but I need to double-check the rules on that.

upvoted 0 times

...

Rodolfo

7 months ago

This seems similar to a practice question we did about member firms and their obligations. I feel like A and C could both be correct, but I’m not entirely sure.

upvoted 0 times

...

William

7 months ago

I think there's a rule against splitting commissions, but I can't recall if that applies to transactions with friends or just in general.

upvoted 0 times

...

Margurite

8 months ago

I remember something about how commissions must be consistent for all clients, but I'm not sure if that applies to non-FINRA members like Phoebe.

upvoted 0 times

...

Jolene

8 months ago

This is a tricky one. I'm not totally sure about the details, but I know FINRA has strict rules about registered reps dealing with non-members. I'll need to review the specifics, but my initial guess is that Chandler is prohibited from doing any transactions with Phoebe. Probably option B.

upvoted 0 times

...

Royce

8 months ago

Okay, I think I've got this. Since Chandler is a registered rep with a FINRA member firm, he has to follow FINRA rules. And one of those rules is that he can't split commissions with someone who's not a FINRA member, like Phoebe. So the answer has to be C or D.

upvoted 0 times

...

Hyun

8 months ago

Hmm, I'm a little unsure about this one. The fact that Phoebe's firm is not a FINRA member seems relevant, but I'm not sure how that affects the rules Chandler has to follow. I'll need to think through the implications carefully.

upvoted 0 times

...

Yuette

8 months ago

This seems like a straightforward question about FINRA regulations. I'll need to carefully review the details about Chandler and Phoebe's employment status and the FINRA rules.

upvoted 0 times

...

Vallie

8 months ago

Okay, I've got a strategy for this. The key is to focus on the relationship between time and risk. The shorter the time, the higher the risk - that's the pattern I'm looking for.

upvoted 0 times

...

Paris

8 months ago

I've got this! Python, Perl, and JavaScript are the three scripting languages that can be used for XSOAR automations. I'm confident in my answer.

upvoted 0 times

...

Kerrie

8 months ago

I vaguely recall discussing the Backup Locations tab and needing to enter credentials, so B might be the right answer after all.

upvoted 0 times

...

Dorothy

8 months ago

This seems straightforward. The guaranteed partnership payment is self-employment income, and the S corporation income is not. The total self-employment income is $50,000.

upvoted 0 times

...

Rasheeda

8 months ago

I remember we discussed sustainable value creation in class, which sounds similar to option B.

upvoted 0 times

...

Martha

2 years ago

I see your point, Justine. But in this case, it seems like as long as Chandler follows the rules of charging the same commission and not splitting commissions, he should be okay.

upvoted 0 times

...

Justine

2 years ago

But what about option B? Couldn't Chandler be prohibited from engaging in any financial transactions with Phoebe altogether?

upvoted 0 times

...

Jose

2 years ago

I agree with Martha, D makes the most sense. It's important for Chandler to follow the regulations when dealing with non-FINRA members like Phoebe.

upvoted 0 times

...

Martha

2 years ago

I think the answer is D, because if Chandler charges Phoebe the same commission as the general public and doesn't split commissions with her, that would comply with the rules.

upvoted 0 times

...