SIE (Securities Industry Essentials) Practice Exam

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Which of the following actions violates FINRA rules regarding outside business activities?

Participating in community service
Receiving compensation from another entity without notifying the employing BD
Investing in personal real estate
Taking a second job with employer consent

The correct answer is: Receiving compensation from another entity without notifying the employing BD

Participating in community service, investing in personal real estate, and taking a second job with employer consent are all allowed under FINRA rules regarding outside business activities. However, receiving compensation from another entity without notifying the employing BD violates FINRA rules as it can create a conflict of interest and compromise the representative's duty to act in the best interest of their clients. This is why option B is the correct answer.