Series 7: 13.4.1 Outside Activities

13.4.1  Outside Activities

Registered persons associated with a member firm cannot accept outside employment for pay without first providing written notice to the firm. The member firm, in turn, must consider whether the outside activity will interfere with the associated person’s responsibility to the firm or be viewed by customers and the public as part of the firm’s own business. Based on the results of this review, the firm may impose conditions on the outside activity or prohibit it outright.

Passive investments are exempt from this rule. A passive investment is one in which a person might invest or earn money in a business activity but can play no active role in its success. Income, if any, may be derived from dividends or royalties but not a salary. Becoming a limited partner in a direct participation program is a passive investment. Worki