SIE (Securities Industry Essentials) Practice Exam

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Under what conditions may an agent share in the profits and losses of a customer's account?

At any time, as long as the broker-dealer approves
Only if the sharing is in direct proportion to the financial contribution made by the agent to the account
If the customer is a family member of the agent
There are no circumstances under which this is allowed

The correct answer is: Only if the sharing is in direct proportion to the financial contribution made by the agent to the account

An agent may share in the profits and losses of a customer's account only if the sharing is in direct proportion to the financial contribution made by the agent to the account. This means that the agent must have a financial stake in the account in order to share in its profits and losses. Options A and C are incorrect because they do not specify any conditions for profit and loss sharing. Option D is incorrect because there are circumstances, such as in option B, under which this is allowed.