According to the NASD, a broker-dealer (BD) must pay commissions to a
licensed individual (i.e. a broker).  The broker-dealer is not allowed
to pay someone commissions who does not hold a securities license. 
However, the NASD does allow a broker-dealer to pay a company if a
licensed broker owns that company.  For example, if a broker-dealer
has a contract with an individual broker and that broker does his
business through the broker-dealer, the BD will pay commissions to the
broker directly.  Sometimes, the broker will establish a company or an
LLC (limited liability company) and the BD will pay the broker's
company; the company in turn pays the broker.  What I need to know is
what percentage of the company must be owned by the licensed broker? 
Does he have to actually own any of the company, or can he simply be
an officer of the company?  Can he just be registered with the company
as the "broker," and then the company owned by a non-licensed entity. 
Can the company be domiciled offshore, or are their restrictions?  Are
their regulations for NASD firms who want to pay an offshore
broker/company according to the NASD?  I need to see documents showing
the requirements according to the NASD.

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Request for Question Clarification by justaskscott-ga on 26 Jan 2003 10:05 PST

Do you know the numbers (or other citations) for any of the NASD rules
that you have mentioned?  The NASD rules are quite lengthy and
complicated, and I presume that most Google Answers Researchers are
not as famaliar with the rules as you seem to be.  However, with some
guidance as to the specific rules you are citing, perhaps we can do
the research that you want.  (Please note the important disclaimer at
the bottom of this page, which states that answers and comments
provided on Google Answers are general information, and are not
intended to substitute for informed professional advice.)

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Clarification of Question by dan89-ga on 26 Jan 2003 23:59 PST

I don't know the source at the NASD to find the answer.  I suspect
their may have been some articles or information that the NASD put out
to answer this.