According to the Financial Industry Regulatory Authority (FINRA), all registered representatives of an investment advisory firm must receive written consent before opening or establishing a brokerage account with another FINRA firm. This is known as FINRA Rule 3210.
More specifically, FINRA states:
(a) No person associated with a member (“employer member”) shall, without the prior written consent of the member, open or otherwise establish at a member other than the employer member (“executing member”), or at any other financial institution, any account in which securities transactions can be effected and in which the associated person has a beneficial interest.
(b) Any associated person, prior to opening or otherwise establishing an account subject to this Rule, shall notify in writing the executing member, or other financial institution, of his or her association with the employer member.
(c) An executing member shall, upon written request by an employer member, transmit duplicate copies of confirmations and statements, or the transactional data contained therein, with respect to an account subject to this Rule.
The issue: What happens if your registered representatives, whether purposefully or not, do not clear said brokerage accounts with your firm prior to opening/establishing an account?
Introducing Undisclosed Account Alerts.
With ComplySci’s Undisclosed Account Alerts, your firm can stay informed and avoid the potential risk which comes with not knowing what you don’t know!
Schedule a demo today to see how we can help you remain compliant through 2023 and beyond.