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Selling away is when an associated person participates in securities transactions not approved or supervised by the firm. This is prohibited under FINRA Rule 3280.

The SEC’s Customer Protection Rule (Rule 15c3-3) mandates that broker-dealers segregate customer securities and funds from firm assets to protect clients in case of financial distress. The rule requires firms to maintain special reserve bank accounts for customer funds and ensure possession and control of fully paid and excess margin securities. Regulation SHO relates to short selling; FINRA Rule 2210 addresses communications with the public; and the Securities Act of 1933 regulates primary offerings. Series 99 candidates must recognize that operations professionals play a direct role in ensuring compliance with Rule 15c3-3 by managing settlement processes, safeguarding client accounts, and supporting custody arrangements. This knowledge demonstrates an understanding of how operational rules directly tie to investor protection and market integrity.

Misusing customer funds violates FINRA Rule 2150 and SEC Rule 15c3-3. It is one of the most serious breaches in broker-dealer operations.

Selling away occurs when an associated person engages in private securities transactions without firm approval. It is a prohibited practice under FINRA Rule 3280.

Omnibus accounts pool client positions at the clearing firm without sharing individual details. This differs from fully disclosed arrangements.