Outside Business Activities (OBA)
Any business activity outside the member firm for which a rep receives or expects compensation — a second job, directorship, or side business — requiring PRIOR WRITTEN NOTICE to the firm before participating.
The exam loves a sorting question: it hands you an activity and makes you pick the correct regime under FINRA Rule 3270 (OBA). The tell is whether the side activity touches securities. Driving for a rideshare, selling real estate, or serving on a paid board is an OBA — the firm reviews the notice and may impose conditions or prohibit it, but the rule requires no advance approval. The moment the activity involves effecting securities transactions, the answer flips to a private securities transaction (Rule 3280). There “compensated” matters: a compensated PST needs the firm’s prior written approval, then the firm must record and supervise it as its own; an uncompensated PST needs only notice and acknowledgment.
The classic trap is treating passive investing as an OBA — you are not running a business. A reportable OBA is also disclosed on Form U4. Memory hook: OBA = tell them; PST = ask them. (FINRA has proposed folding 3270 and 3280 into a single Rule 3290, not yet effective as of 2026.)
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