In a request for interpretive guidance, a member asks if NASD Rules prohibit a member from paying finders or referral fees to CPAs that are not registered as associated persons.
Broker/dealer should seek SEC interpretative advice regarding "override" payments to insurance company for securities transactions executed by registered representatives who are associated with both the broker/dealer and the insurance company.
Entity should obtain a "no action" letter from the SEC before NASD Regulation will determine whether payment of non-transaction-based compensation from a member to a non-member for administrative and clerical services under a preferred alliance agreement would violate Rule 2420.
Joint sales efforts by member firm and non-member real estate firm of private placements in real estate condominium complexes raise the question of whether the realtors or persons acting on behalf of the issuer would be required to register as broker/dealers.
<p>Employee Leasing Arrangement Does Not Violate Rule 2420</p>
<p>A member that is an investment adviser may pay a non-member certain fees and not violate Rule 2420 if the fees paid to the non-member (a) strictly follow the requirements of Rule 206(4)-3 under the Investment Adviser's Act of 1940; and (b) are paid from fees and other income that the member has received in its capacity as an investment advisor.</p>
<p>Rebate of SEC Rule 12b-1 fees and commissions to non-member retirement plan and its participants will not violate NASD Rule 2420 if the SEC determines that the rebate recipients are not required to register as broker/dealers.</p>
<p>Proposed employee leasing arrangement does not violate Rule 2420.</p>
Application of Rule 2370 to lending arrangements between registered persons and banks or other financial institutions in the business of lending money.
<p>A partnership registering as a broker/dealer, which will be trading only for its own account, has no customers for purposes of Rule 2330(f).</p>
