Under what circumstance may an RR pay a customer a finder's fee?

The correct understanding is that payment of a finder's fee to a customer is generally prohibited under securities regulations. This restriction is in place primarily to prevent conflicts of interest and ensure that all compensation in the securities industry is reported and regulated properly.

Finder's fees are typically payments made for introducing a buyer to a seller, and permitting such payments to customers could lead to unethical practices, such as encouraging customers to refer business for personal gain rather than for the benefit of the firm or the investor.

Regulatory authorities, such as the Financial Industry Regulatory Authority (FINRA), have established rules disallowing this practice unless it adheres to strict guidelines. The regulation of compensation structures is vital to maintain the integrity and transparency of securities transactions.

In this context, the other options suggest possible scenarios where a finder's fee might be permissible, but they do not align with the actual restrictions imposed by regulations. Therefore, the prohibition is absolute under standard conditions, making it clear that there are no acceptable circumstances under which a registered representative can pay a customer a finder's fee.