Interpretive Letter to Francis X. Stone, Esq.
January 29, 1998
Francis X. Stone, Esq.
616 Hyde Park Ave.
Boston, MA 02131
Dear Mr. Stone:
I am responding to your letter of December 4, 1997. You request whether a registered representative who does not have a Series 8 license is permitted under securities industry rules and regulations to pay the salary or hourly fee of a securities industry employee.
As you know, it is not an uncommon practice in the securities industry for a registered representative to utilize the services of a sales assistant and pay for part or all of the assistant’s compensation through commissions generated by the registered representative’s production or by some other means. Such a practice is not specifically prohibited by NASD rules and would not, by itself, require the registered representative to register as a Limited Principal - General Securities Sales Supervisor under NASD Rule 1022(g).
I hope this letter is responsive to your inquiry. Please note that the opinions expressed herein are staff opinions only and have not been reviewed or endorsed by the Board of Directors of NASD Regulation. This letter responds only the issues that you have raised based on the facts as described, and does not address any other rule or interpretation of the Association, or all the possible regulatory and legal issues involved.
Robert J. Smith
Office of General Counsel
NASD Regulation, Inc.