Under what condition may a RR share in the profits and losses of a customer’s account?

A registered representative (RR) may share in the profits and losses of a customer’s account with written consent from both the customer and the firm. This requirement is in place to ensure that both parties are aware of and agree to the circumstances under which sharing occurs, thereby protecting the interests of the customer and maintaining the integrity of the firm. Such arrangements are subject to regulatory oversight, as they could potentially lead to conflicts of interest or other ethical concerns.

Written consent ensures that the customer understands the nature of their relationship with the RR and the implications of sharing in the account’s performance. It also holds the firm accountable in monitoring these arrangements to ensure that they comply with applicable regulations and uphold the standards of fair dealing in the securities industry.