FINRA Rule 3270 requires registered representatives to provide prior written notice to their member firm for any outside business activity (OBA). An OBA is defined as any business activity outside the scope of the relationship with the member firm for which the representative receives, or has a reasonable expectation of receiving, compensation. Serving as a board member for a publicly traded company is a formal business role that almost invariably includes compensation (e.g., cash, stock, or options). This activity must be disclosed on Form U4 so the firm can assess potential conflicts of interest.

A. Volunteer work for a local charity is not a reportable OBA because, by definition, it is uncompensated.

B. Acting as a trustee for a family member's estate is generally not considered a "business" activity, especially if uncompensated, and thus does not require disclosure.

D. The disclosure requirement under FINRA Rule 3270 is triggered by compensation. Serving without compensation for a non-profit entity is not a reportable OBA.

1. Financial Industry Regulatory Authority (FINRA). (2023). FINRA Rule 3270. Outside Business Activities of Registered Persons.

Reference: The rule states, "No registered person may be... a director... of another person, or be compensated, or have the reasonable expectation of compensation, from any other person as a result of any business activity outside the scope of the relationship with his or her member firm, unless he or she has provided prior written notice to the member..." This directly identifies being a director for compensation as a reportable OBA.

2. Financial Industry Regulatory Authority (FINRA). (2023). General Instructions for Form U4.

Reference: Section 13, "Outside Business Activities," requires disclosure of any business or activity outside the firm where the individual is engaged as an officer, director, employee, etc. The instructions clarify this includes activities for which compensation is received, making a paid board position a mandatory disclosure item.

3. Georgetown University Law Center. (2022). Securities Regulation (LAWJ-559-01) Course Syllabus.

Reference: Course materials covering broker-dealer regulation often review FINRA rules of conduct. Discussions on FINRA Rule 3270 emphasize that the key determinants for disclosure are the nature of the activity (business-related) and the presence or reasonable expectation of compensation, distinguishing it from personal or uncompensated volunteer activities.