tag:blogger.com,1999:blog-6474024174085167013.post3328202289035323124..comments2024-02-16T08:42:37.676-06:00Comments on Passing the Series 65 and 66 exams: If you pay someone a referral fee do they have to be registered?Unknownnoreply@blogger.comBlogger2125tag:blogger.com,1999:blog-6474024174085167013.post-49271177619256837832009-02-17T14:08:00.000-06:002009-02-17T14:08:00.000-06:00As you can see, I didn't exactly jump at the chanc...As you can see, I didn't exactly jump at the chance to respond to this question. This one is tough. Basically, I can find nothing that says it's okay for the existing Rep to keep paying an unregistered former rep. NASD/FINRA has a rule allowing a member firm to pay continuing commissions to a retired rep and even to his/her beneficiary upon death. But, there has to be a contract in place (for which FINRA refuses to specify the contents), and the payment has to be on old business only. And, the rule doesn't say it's okay for reps to pay other reps who are no longer in the business.<BR/>This question makes me think the unregistered rep would be getting paid on new business from the word "commissions," which sounds like new transactions . . . as opposed to receiving "trailers" through 12b-1 fees paid on mutual fund and variable annuity accounts placed while the agent was registered. <BR/>So, I can't answer with total confidence, but unless I see a clear angle that would allow something like this, I err on the side of caution--I would answer that, no, Rep A can not continue to pay Rep B. He would be sharing commissions with an unregistered person. My contacts in the industry can find no reason to allow Rep A to pay Rep B . . . but I will keep looking.<BR/>Thanks for a tough question.B Walkshttps://www.blogger.com/profile/13428079363476989854noreply@blogger.comtag:blogger.com,1999:blog-6474024174085167013.post-75599502737838365982009-02-13T13:33:00.000-06:002009-02-13T13:33:00.000-06:00Hi. I've taken and passed the 7 and 63 with your h...Hi. I've taken and passed the 7 and 63 with your help. Thanks. I have a question that is sort of in the mindset of this thread...<BR/><BR/>Rep A and Rep B are both registered with Alpha Brokers Stock Brokerage. The 2 reps together bring in an institutional client. The firm pays rep A 100% of the commission and Rep A pays Rep B 30%. Rep B leaves the firm and is unregistered. Can Rep A continue to pay Rep B from his commissions?Anonymousnoreply@blogger.com