Every so often your firm will have you fill out an OBA questionnaire. Whatever you do, before filling it out, talk it over with a lawyer! NEVER rely on management to get it right, especially if you have a good-sized book of business.
They don’t know what they’re doing half the time. And, they’d love to hand that book of yours off to somebody else and leave you with a burned U5 and no job, or any chance of working in the industry anymore.
What often happens is that management will look at a potential entry on these questionnaires, and say, “Oh, that? That’s no big deal. You don’t need to report that. Don’t worry about it.”
Worry about it. Seriously. Ask a lawyer what he or she thinks about it first. Any kind of business that at first glance seems like it may not need to be reported likely needs to be reported. Example: Your spouse has a new business they’re putting together and you co-signed on a loan for it, or maybe loaned them some money yourself, or you spend a few hours a month helping them out with it somehow. Maybe you’re on the lease for a new office space for that business. Most anything can pull you in as a participant in that business, and now you’ve got an OBA that should have been reported. It’s not about ownership. It’s about PARTICIPATION IN THE BUSINESS.
What can happen if you get this wrong? Your employer can use it against you later to terminate your position with the firm. Then, they can put an “unauthorized outside business activity” on your Form U5, 1) making it hard for you to get another job in the securities industry and 2) drawing unwanted attention from FINRA Enforcement, who will scrutinize the living daylights out of your OBA. Worst case scenario, you could be barred from the industry altogether.
