I struggled with this for Level 2. Here was the conclusion I came to - please correct if wrong:
If you are engaging in an activity that is finance related (competitive practice), you need written approval all around.
If you are engaging in a non-finance related job (i.e. bar tending), no approval is needed.
But! If the bar-tending job is taking up so much of your time / energy that it detracts from your performance at your primary, finance related job, you have to quit the bar-tending job beacuse you are depriving your employer of your skills and abilities and violating the general loyalty standard.