Chapter 9.1 Flashcards
Principal Registration
Is required of persons associated with a member who are actively engaged in the management of the member’s investment banking or securities business, including supervision, solicitation, conduct of business, or the training of persons associated with a member for any of these functions are designated as principals. Such persons also include:
- Sole proprietors
- Officers
- Directors active in the business
- General Partners active in the business
Registered Representative Registration
Required of persons associated with a member. Includes those who are engaged in the investment banking or securities business for the member including the functions of supervision, solicitation, or conduct of business in securities or those who are engaged in the training of persons associated with a member for any of these functions. The following are designated as representatives:
- Solicitors of investment banking or securities business
- Traders
- Assistant officers
- Training directors
Financial Principal Registration
Required of a person responsible for the preparation of a firm’s financial statements and net capital computations.
Registration as an Assistant order processing representative(Series 11)
Required for persons who only accept unsolicited orders from customers. They cannot recommend securities, trade for the firm, or qualify prospective customers, or be paid commissions.
Branch office manager assistants
If branch managers want to delegate some of their responsibilities to their assistants, the assistants will be required to pass the appropriate exam and must still be under supervision of the Branch Office Manager
Operations Professional
Include senior management with direct responsibility over the covered operations functions and any person designated by senior management as a supervisor, manager or other person responsible for approving or authorizing work, including work of other persons, in direct furtherance of each of the covered operational functions and persons with the authority or discretion to commit a member’s capital in direct furtherance of the covered operational functions.
-Covered operational functions include but are not limited to client on-boarding, collection, maintenance and disbursement of funds, receipt and delivery of securities, account transfers, banking, settlement, customer confirmations and statements, margin, stock loans, and prime brokerage services.
Independent Contractors
Persons which may sell securities or mutual funds. Independent contractors are considered to be employees of the B/D. Independent contractors must be licensed as RR’s and must be supervised by a Registered Principal of the firm.
Registration status of persons in armed forces
- Registered persons who enlist or are called for active duty shall be placed on inactive status and do not have to re-register upon their return. They are allowed to receive commissions while on duty. The firm may allow the person to set up another registered person to take over and share compensation. This rule applies whether the person returns to the same firm or to a different firm.
- If a person who was previously registered but is no longer registered and is within 2 years of the date of termination on his U-5 form, FINRA will defer the lapse of registration. The deferral will terminate 90 days following the person’s completion of active service or re-registration with a member firm, whichever occurs first.
- Continuing Education requirements are deferred while a registered person’s licenses are in an inactive status.
Investment Advisor
Is a person who receives compensation for giving investment advice about securities.
**Exemptions from investment adviser registration includes Lawyers, Accountants, Teachers, and Engineers(LATE) who give advice as an incidental part of their ordinary business and do not charge a separate fee for the investment advice
Sales Assistants
Unregistered: Perform clerical duties only
Registered: Can assist with sales. If such an assistant is arrested and charged with a crime, that persons U-4 information must be updated promptly.
Securities Traders and Algorithmic Trading Strategy Developers
Requires registration of persons involved in NASDAQ equity trading, OTC equity trading, proprietary trading, and persons primarily responsible for the design, development, or significant modification of an algorithmic trading strategy for equity, preferred, or convertible debt securities or the day-to-day supervision of such activities.
