Trading, Accounts & Prohibited ActsQuestion 297 of 398
The prohibition on 'selling away' exists primarily to ensure that:
a.A firm can supervise its representatives' securities transactions to protect customers
b.Representatives earn higher commissions
c.Customers avoid paying any fees
d.Only institutions can buy private placements
Explanation
Selling away is prohibited because private securities transactions conducted outside the firm's knowledge escape its supervision, exposing customers to unvetted, potentially fraudulent investments. Requiring prior notice and approval lets the firm supervise and protect customers.
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