Finra
A registered representative (RR) wants to participate in a private securities transaction. Which of the following actions must the RR take?
Private securities transactions require WRITTEN notice BEFORE participating.
Complete Analysis & Legal Rationale
Under FINRA Rule 3280 (Private Securities Transactions), also known as "selling away," an RR must provide WRITTEN notice to the member firm BEFORE participating in any private securities transaction. The notice must describe the proposed transaction and the RR's role, including any compensation to be received.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
A verbal meeting is not sufficient - written notice is required.
A phone call is not adequate - written documentation is mandatory.
Matches the verified teaching point in the explanation.
The notice must be provided BEFORE the activity begins, not after.
Official Standard: Primary source referenced in the explanation (FINRA Rule 3280). Verify before launch.