Discuss Finra SIE Exam Topic 6 Question 21

Under FINRA rules, which of the following activities is not considered an outside business activity (OBA)?

ASelling real estate

BSelling health insurance

CProfessionally refereeing athletic events

DPassively investing in a multifamily house for rental purposes

Suggested Answer: D

Step by Step

Outside Business Activity Definition: Per FINRA Rule 3270, an OBA involves compensated business activities outside the scope of the RR's role at their firm. Passive investments are excluded because they do not require active involvement.

Incorrect Options:

A, B, and C: Selling real estate, selling insurance, and refereeing are considered OBAs as they involve active participation and compensation.

FINRA Rule 3270 (Outside Business Activities): FINRA Rule 3270.

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15 comments · newest first

Ariel 3 months ago

Makes sense. I feel confident about this question now.

Heike 3 months ago

Exactly! Less risk of conflict with FINRA.

Mona 3 months ago

They require more involvement. D is just investing.

Ariel 3 months ago

But A and B seem like OBAs too. Why not?

Heike 4 months ago

Agreed, D doesn't involve active management.

Mona 4 months ago

I think D is the answer. It's passive.

Lazaro 4 months ago

Really? I’m surprised that passive investing isn’t included.

Lindsey 4 months ago

I thought selling health insurance was also an OBA.

Melda 4 months ago

Wait, how is selling real estate an OBA? Seems odd.

Lorrie 6 months ago

Totally agree, D is the right choice!

Barrett 6 months ago

D is not considered an OBA.

Romana 7 months ago

I recall that activities like refereeing might not be classified as OBAs, but I can't remember the specifics.

Johnathon 7 months ago

I practiced a similar question where selling insurance was considered an OBA. I wonder if that applies here too.

Bernardine 7 months ago

I'm not entirely sure, but I feel like selling real estate could be an OBA. I need to double-check that.

Deeann 7 months ago

I think I remember that passive investments aren't considered OBAs, so I might go with D.

Finra SIE Exam - Topic 6 Question 21 Discussion