NASAA Model Rule on Dishonest or Unethical Business Practices of Broker-Dealers

FINRA FINRA Series 66
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In reading the NASAA Model Rule on Dishonest or Unethical Business Practices of Broker-Dealers and Agents, the law states: “Sharing directly or indirectly in profits or losses in the account of any customer without the written authorization of the customer and the broker-dealer which the agent represents” It does not specify any rule regarding proportionate capital contribution; whereas, FINRA does. Would you mind taking another look to see whether we should interpret to omit that specification or include it? STC and “Series7Guru” teach to include the proportionate capital requirement; however, Achievable advises to follow NASAA as it is written.
To provide color on my added confusion, here is the response from Series7Guru - “Remember NASAA’s is a template not actual rules. FINRA has actual conduct rules. I would know that agents of broker/dealers can share in profits and losses with proportionate capital and principal approval. Dont make the test harder than already is.”

Thank you!

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Great question! We’ve reviewed NASAA’s publication and discussed this with an instructor, and we feel it’s best to take the publication at face value: written authorization from the customer and the firm is required, but proportionate capital is not a requirement.

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Thank you about to walk in to test. Wish me luck!

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