Unit 15- Handling Customer Accoubts

Question 1

What is on a customer trade confirmation?

Answer 1

• If the firm acted as agent or principal
• If the firm acted as a duke agent
• (agency trade) $ of commission
• If a control relationship exists
• (if applicable) disclosure of a deferred sales load
  -(principle trade) $ markup/markdown
  -name id security, price, and # purchased
  -(if debt security) total par value
  -(if debt security) total accrued interest
• if the member if a market maker
  -date and time of transaction
• (if debt security) YTC or YTM, whichever is lower
• handling fees or mailing charges

Question 2

When must a trade confirmation be delivered?

Answer 2

At or before settlement.

Question 3

What is required for electronic delivery of customer docs?

Answer 3

Their signature

Question 4

How long must trade confirmations be kept?

Answer 4

3 years

Question 5

Rules regarding delivery of customer account statements?

Answer 5

• Minimal delivery is quarterly
• If the account holds penny stocks, delivery must be monthly
• If the account holds a DPP or an unlisted REIT, the per share estimated value of the asset must be on the statement.

Question 6

When opening a new account, when must the new account docs/records be sent to the customer?

When must updated records be sent?

Answer 6

Within 30 days of opening the account, and then every 36 months thereafter.

Question 7

If account information is changed (name, address, etc) does a new account record need to be sent?

Answer 7

Yes, within 30 days of the change.

Question 8

After an account closes, how long must CIP information be retained?

Answer 8

5 years

Question 9

When transferring an account via ACAT, how long does the carrying firm have to validate and send the securities?

Answer 9

1 day to validate, and 3 days to send (if no issues were found)

Question 10

What are the term lengths for keeping records?

Answer 10

Lifetime
- Stock certificate book
-partnership agreement
-Mins of board meetings

6 year
- blotters
- general ledger
- stock ledger
- customer ledgers
- account records
- designated principal records

3 year
- virtually all other records
- trade confirmations
- u4
- finger print cards
- order tickets
- etc…

Question 11

How long must customer complaints be kept on the records?

Answer 11

4 years

Question 12

What happens when an account holder does?

Answer 12

• cancel open orders
• mark account as deceased
• freeze assets
• wait for documentation from the executor of the estate

Question 13

According to FINDA, how often does a AML training need to take place?

Answer 13

No specific schedule, but “on an ongoing basis”.