Unit 5- Customer Accounts Flashcards
New Account Form
Personal Info of Customer filled out by registered representative
- includes (occupation, income/networth, investment objectives, brokerage references, employee of another broker/dealer, how account was acquired)
- Signature of Principal/Branch manager (not signature of registered representative or Customer
- REQUIRED BY FINRA
USA PATRIOT ACT of 2001
designed to detect and prevent money laundering and financing of terrorism
CIPs
Customer Identification Programs
- keep records of identification, which are checked against Specially Designated Nationals (SDN list) maintained by Foreign Asset Control
SDN
Specially Designated Nationals (list of suspects)
OFAC
Office of Foreign Assets Control
- maintains the SDN which includes individuals and companies owned/controlled/acting in interest of targeted countries or individuals
Regulation S-P
enacted by SEC
- FIRM must provide privacy notice to customers when new account is opened.
IF FIRM HAS RIGHT TO DISCLOSE PRIVATE INFO to 3rd Parties, must provide customers with a reasonable means to opt-out of this disclosure
Trading Authorization/Power of Attorney
someone other than owner having authority to buy/sell securities on behalf of owner
Discretionary
registered representative or other person who has written authorization from customer
Custodial
an adult designated to act on behalf of minor, who is the beneficial owner of the account
Fiduciary
3rd party who is legally appointed to prudently manage the account on behalf of another person/entity
Transfer & Ship
securities registered in customer’s name and shipped to them
Transfer and hold in safekeeping
securities registered in customers name, held by broker/dealer in safekeeping
Hold in Street Name
Registered in broker/dealer name and held by broker/dealer. Customer is the beneficial owner
Delivery Versus Payment (DVP)
securities are delivered to bank or depository against payment.
**USED FOR INSTITUTIONAL ACCOUNTS
Direct Registration System
- option to hold assets in book-entry form
- service by DTC (Depository Trust Company)
Cash Accounts
customer pays in full for any securities
What type of accounts must be cash accounts
personal and corporate retirement accounts and custodial accounts
When you join a firm as employee, who must you notify of existing accounts?
Both the employer firm and the account firm in written form
In joint accounts, does mail need to be sent to both parties?
No
What if client wants to make an unsuitable investment?
Place order BUT mark as unsolicited (ORDER DOES NOT NEED TO BE PUT INTO WRITTEN FORM)
What paperwork is needed for a guardian account
copy of court order guardianship
If a son has durable PoA over mother and he dies, what happens?
the PoA expires
If paper work is “in the mail”/pending approval for discretionary account, under any circumstances can a discretionary order be made?
NO
Can PO box be used as a mailing address?
No unless it is attached to a physical address
In custodial account, what should be done with cash dividend
They can sit for short period of time in anticipation of reinvestmnet
