The self-supporting spouse of a registered rep has an account with your firm. Your firm is underwriting the initial public offering (IPO) of ACME Co. common stock, and the spouse inquires about whether it is possible to receive an allocation. The registered rep should inform the spouse that the issue:
a. cannot be purchased through the IPO
b. can only be purchased through the IPO if the amount purchased is insubstantial
c. can only be purchased through the IPO with the approval of FINRA
d. can be purchased through the IPO without restriction

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eooyibo123 eooyibo123 · Answer 1 · 2020-02-17T09:32:24+01:00

Answer:

a. cannot be purchased through the IPO.

Explanation:

The Financial Industry Regulatory Authority (FINRA) does not allow purchase of IPO stock by insiders.

It states that no FINRA member firm should sell IPO shares to an account where a restricted person has an interest.

Restricted persons are defined as anyone that is employed by a broker or their immediate family.

So the spouse of the registered representative cannot be given an allocation in the IPO share sale.