What must occur before a registered representative can exercise discretionary power on a client's behalf?

For a registered representative to exercise discretionary power on a client's behalf, the client is required to provide written authorization. This written consent is critical because it establishes a formal understanding between the client and the representative regarding the scope and limitations of the discretionary authority.

Discretionary power refers to the ability of a registered representative to make investment decisions without having to consult the client for each transaction. This includes decisions about which securities to buy or sell, as well as the amount of securities to be traded. The necessity for written authorization serves to protect the client by ensuring that they have explicitly agreed to grant this authority, thus providing a legal record of the client's intentions.

Verbal authorization, while it might provide immediate consent for a specific transaction, does not suffice for granting discretionary authority in a comprehensive manner. Approval from a supervisor is typically related to compliance and oversight, but it does not replace the need for the client's written consent. Lastly, the value of the transaction being low does not influence the requirement for discretionary authority; the need for written authorization applies regardless of the transaction size.