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- FINRA Rule 3210 requires a registered representative to receive prior written consent from the member firm with which they are registered (the employing member) before opening any account, in which securities transactions can be effected and in which the registered person has a beneficial interest, at any other member firm (the executing member) or other financial institution.
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dually registering as a representative or principal, rendering investment advice or opinion, making recommendations, making transactions in securities markets on behalf of the firm, accepting or opening new accounts, or. prequalifying potential customers.
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FINRA Rule 3210 requires a registered representative to receive prior written consent from the member firm with which they are registered (the employing member) before opening any account, in which securities transactions can be effected and in which the registered person has a beneficial interest, at any other member firm (the executing member ...
- Minimum Number of Registered Principals. Each member, except a member with only one associated person, shall have at least two officers or partners who are registered as General Securities Principals pursuant to Rule 1220(a)(2), provided that a member that is limited in the scope of its activities may instead have two officers or partners who are registered in a principal category under Rule 1220(a) that corresponds to the scope of the member's activities.
- Permissive Registrations. A member may make application for or maintain the registration as a representative or principal, pursuant to Rule 1220, of any associated person of the member and any individual engaged in the investment banking or securities business of a foreign securities affiliate or subsidiary of the member.
- Qualification Examinations and Waivers of Examinations. Before the registration of a person as a representative can become effective under Rule 1210, such person shall pass the Securities Industry Essentials ("SIE") and an appropriate representative qualification examination as specified in Rule 1220(b).
- Requirements for Registered Persons Functioning as Principals for a Limited Period. Subject to the requirements of Rule 1220.03, a member may designate any person currently registered, or who becomes registered, with the member as a representative to function as a principal for a period of 120 calendar days prior to passing an appropriate principal qualification examination as specified under Rule 1220(a), provided that such person has at least 18 months of experience functioning as a registered representative within the five-year period immediately preceding the designation and has fulfilled all applicable prerequisite registration, fee and examination requirements prior to designation as a principal.
- FINRA Rule 3210 Overview
- Understanding A Financial Advisor’s Requirements Under FINRA Rule 3210
- Contact Our FINRA Arbitration Lawyers Today
In April of 2016, the Securities and Exchange Commission (SEC) approved FINRA Rule 3210. The rule actually went into effect as of April 1st, 2017. This rule is a very important industry safety guard that governs how registered financial advisors can use brokerage and investment accounts outside of their own member firm. The primary purpose of the r...
Regulates the Use of Outside Accounts
As a general matter, brokerage firms are able to monitor the internal investment accounts of their own employees without much trouble. However, monitoring outside accounts can be a problem. With this in mind, FINRA Rule 3210 seeks to regulate the use of outside (non-member firm) accounts by registered financial advisors.
Requires Notification and Consent
The requirement under FINRA Rule 3210 is relatively straightforward: All registered investment advisorsmust declare their outside accounts to their member firm and notify their member firm in writing when they intend to open any new account. Further, to open or maintain an outside account, a registered financial advisor must have obtained written consent from their employer. If a financial advisor fails to notify their member firm, or if they fail to obtain consent, then the rule has been vio...
Applies to the Investment Accounts of “Associated Persons”
Additionally, registered financial advisors must also notify their employers regarding the accounts of any “associated persons”. The term associated person covers immediate family members and any other party whose account provides an interest for the financial advisor. Generally, this includes spouses, financially dependent children, other dependents, and any other person who has given control of their account to the financial advisor.
At Sonn Law Group, our legal practice is dedicated to protecting the rights and interests of investors. If you believe that you lost money due your broker’s negligence or conflicting interests, we are here to help. For a free, fully confidential case evaluation, please contact our teamtoday. From our primary office in Aventura, Florida, we represen...
FINRA does not implement taping requirements for firms with 4 or fewer registered representatives. To better understand this rule, let’s explore a few examples. A member firm employs 8 registered representatives.
Apr 8, 2024 · Key Takeaways. A registered representative (RR) is a financial professional who is able to deal with client transactions in the securities markets. RRs must pass strict licensing requirements,...
Rule 3241 does not prohibit a registered person from being named a beneficiary of or receiving a bequest from a customer’s estate. Further, registered persons who do not have customer accounts assigned to them are not subject to the Rule. Member Firm’s Obligations.
