NASAA Dishonest Practices: Compensation Provisions

What this video covers

• Why unfair pricing at the state level mirrors federal fair-pricing rules, creating dual enforcement exposure for a single violation
• The specific NASAA prohibition on transactions at prices not reasonably related to current market price, and on unreasonable commissions or profits
• How unreasonable and inequitable fees for non-transaction services (safekeeping, custody, appraisals, transfers, collection of principal or dividends) are independently violative under NASAA's dishonest practices policy
• The exact two-part test NASAA states for excessive trading: firm-induced trading that is excessive in size or frequency relative to the customer's financial resources and account character
• Why turnover ratios, control of the account, and commission-seeking intent are evidentiary indicators in broader churning analysis but are NOT required elements under NASAA's written provision
• The critical distinction between customer-directed frequent trading and firm-induced excessive trading when evaluating churning violations
• The narrow permitted scope of commission splitting: only with another registered agent at the same broker-dealer or an affiliated broker-dealer under direct or indirect common control