Question

Under MSRB rules, a registered representative is prohibited from sharing in the gains and losses of a customer's account unless the:

Answer 1

Answer:

D)

Explanation:

This is the case unless the registered representative contributes capital proportionate to his sharing percentage and receives written approval of the principal. This is because the MSRB clearly prohibits this, but if the registered representative opens a joint account with the customer (granted the customer approves), and shares in both the gains and losses of the account with a proportionate capital contribution, then both are entering into the same risk and are allowed to share in the gains and losses. This is as long as the principal provides written approval.