Let’s take a look at what constitutes as “selling away” and what are some defined examples.
Private Placements and Private Securities Transactions
Registered Representatives (RRs) and Investment Adviser Representatives (IARs) are strictly prohibited from offering, recommending, or facilitating client participation in any securities transactions, including private placements, not offered through ESI.
Facilitating an investment with, or referring a prospective investor to, a private placement issuer or underwriter without the Firm’s approval constitutes participation in a private securities transaction, which is commonly referred to as “selling away”. “Participation” includes any involvement in introducing a potential investor to an issuer or underwriter (including distributing offering materials or setting up introductory meetings or phone calls), even if you’re not directly involved with the actual solicitation. Such conduct may result in disciplinary action, up to and including termination from ESI.
Examples of private securities transactions include, but are not limited to:
- Promissory Notes
- Viatical Settlements
- Venture Capital
- Real Estate Private Placements
- Hedge Funds
- Oil and Gas Private Placements
- Private Equity
- PPLI (Private Placement Life Insurance)
- Advanced life-insurance strategies involving private securities or private placements
- Products not offered on ESI’s approved product list