Rule 2040

Let’s talk about commissions today.  Or, as they are sometimes referred to, transaction based compensation.  Specifically, who can receive commissions.  Actually, that’s not phrased correctly.  The correct phrasing of this issue, courtesy of FINRA Rule 2040, would be: to whom a broker-dealer may legally pay commissions?  According to that rule, BDs can only pay…

There are lots of FINRA rules, so many that some don’t get the attention they deserve because others, like the suitability rule or the supervision rule, generally hog the limelight. Moreover, some rules have such narrow application that you may not realize they even exist because they impact only a very few people or entities.…