A Member firm is owned by a large Canadian bank. The bank offers a bonus to the Member's Registered Representatives for every client they refer to the bank's mortgage department. Which section of Rule 5.1(r) primarily governs the documentation of this arrangement?
1 attempts · 100% correct
Rule 5.1(r)(ii), because it is an incentive practice from which an affiliate benefitsCorrect
Rule 5.1(r)(i), because it is an internal sales strategy of the Registered Representative
No documentation is required under Rule 5.1(r) if the bonus is paid by the bank rather than the Member
Rule 5.1(r)(iii), because referral fees require a temporary hold on commissions
Why
Rule 5.1(r)(ii) specifically covers compensation arrangements and incentive practices involving affiliates or associates.
