TAKING THE SERIES 6 EXAM, KNOW RULES REGARDING NETWORKING BETWEEN BROKERS AND FINANCIAL INSTITUTIONS
FINRA publishes a Content Outline for the Series 6 exam, the exam that tests applicants on investment companies and variable contracts. In Section 1.2 of the series 6 Content Outline, FINRA lists one of its own rules as important to know for the exam. This rule deals with networking arrangements between members and financial institutions. But what exactly is "networking"? Bob Eder defines networking in his book, Study for the Series 6 Exam , in the following manner: "Networking with Financial Institutions (1.2) FINRA recognizes that when a broker/dealer and a bank agree to share office space, this could cause significant misunderstandings by people who utilize the services of the broker/dealer. Specifically, when a bank rents space within its branch office to a broker/dealer or one of its representatives, customer could think that the securities offered by the broker or dealer are FDIC guaranteed or covered by the FDIC. To prevent this misunderstanding, FINRA has adopt...