Outside Business Activities and Private Securities Transactions
Chapters in this video
- 0:00 Equity counts as compensation: the OBA trigger
- 1:16 Priya's three-step OBA evaluation workflow
- 2:40 Material changes require fresh OBA notice
- 3:13 PST definition and the three exam exclusions
- 4:21 "Participation" is broader than handling money
- 5:01 The selling-compensation fork: two supervisory paths
- 6:14 Approval of compensated PSTs means books-and-records entry
- 6:39 Selling away: the triple-threat violation stack
- 7:11 Rapid-fire exam recap
What this video covers
- Why equity, warrants, and non-cash compensation still trigger the outside business activity (OBA) prior-written-notice requirement
- The two factors a principal must evaluate after receiving OBA notice: interference with firm duties and attribution risk to customers
- When material changes to an already-approved OBA require fresh written notice and reevaluation
- The three explicit exclusions from private securities transaction (PST) rules: firm-overseen outside accounts, no-selling-compensation family trades, and personal investment-company transactions
- Why "participation" in a PST is interpreted broadly, including introductions, document delivery, and check facilitation without deposit
- How the firm's required supervisory response splits based on selling compensation: formal written approval or disapproval with books-and-records entry, versus prompt written acknowledgement without books entry
- Why selling away typically triggers three simultaneous violations: PST, OBA, and commercial honor
Read the full lesson, free
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