Outside Private Transactions (Selling Away)
Private securities transactions are transactions made by an associated person outside the scope of that person’s employment. For example, if a representative sells shares in a real estate partnership that is not a product of his firm, this would be considered a private securities transaction. Also known as selling away, the practice may include purchases or sales to the firm’s own customers or to people outside the firm. In either case an associated person is prohibited from engaging in such transactions, without first providing written notice to his employing firm. The written notice must describe each transaction in detail, the person’s proposed role in it, and whether a selling commission will be part of the deal.
When a registered representative engages in selling away, his firm will not have performed due diligence on the product. Nor will the firm have a record of the transaction or have reviewed it for custo