I understand that the code requires that Charterholders and candidates disclose whether or not they receive referral fees. That being said, must specific amounts be disclosed? Or is it sufficient to state that referral fees are received.
In other words, which of the following would suffice?
I am paid referral fees by company A for each and every one of my clients that purchases a product from company A as a result of my referral.
I am paid referral fees by company A of $100 for each and every one of my clients that purchases a product from company A as a result of my referral.
Specify All Monetary Consideration, Both Given and Received - This disclosure must be in clear language - for example: “I receive a flat commission equal to 0.75% of your account value.” Specify whether fees are deducted from the client’s personal account, and explain to the client if a referral fee is included as an additional hidden fee within the trading commissions.
Provide Written Disclosure - Fee arrangements should be included as a part of the contract that is written and signed by both parties.
Inform Supervisor and Compliance Officer - Let both parties know about any proposed new referral arrangement, and seek legal counsel if clarification is necessary.