Some CPA firms have indicated that they do not wish to become licensed to sell securities due to “selling away” issues. What are they?
CPAs who become securities-licensed generally affiliate with one broker-dealer to maintain a clear chain of regulatory responsibility from the SEC to the FINRA and then to the broker-dealer, its branches, and the representative. “Selling away” is a practice prohibited by the FINRA in most cases. It means registered representatives are not allowed to offer investment-related services or products not specifically reviewed and approved by the broker-dealer. Broadly interpreted, the FINRA has defined it to encompass virtually any “compensated relationship” relating to investments. For example, any of the following common CPA services (not approved by the broker-dealer) may be defined as “selling away”: • Reviewing real estate and other private deals that clients regularly bring to CPAs for analysis • Receiving stock in exchange for CPA services to help create a new company or project that will seek outside investors • Inviting clients into real estate and other business deals of other succ
Related Questions
- I am an out-of-state CPA who performs peer reviews for California accountancy firms. Would I be required to obtain a California Practice Privilege?
- Some CPA firms have indicated that they do not wish to become licensed to sell securities due to "selling away" issues. What are they?
- Are firms that sell Municipal Fund Securities subject to the rules of the MSRB?
