Last week’s Bridging the Weeks included an article entitled, “New FINRA Rule Governing Accounts Opened by Associated Persons at Broker-Dealer Other Than Employer Approved by SEC” (click here to access). After initial publication, the Compliance Weeds accompanying the article was subsequently amended to read as follows:
Regulations of the Commodity Futures Trading Commission have equivalent requirements as FINRA regarding accounts of “affiliated persons” of futures commission merchants and introducing brokers (Click here to access CFTC Rule 155.3 and 155.4). In general, an affiliated person of such registrants needs to obtain the written authorization of his or her employer to maintain an account with a third-party FCM. Moreover, the third-party FCM must afterwards on a “regular basis” send copies of all account statements related to such an account and “all written records prepared upon receipt of orders for such account.” FCMs receiving such orders must prepare immediately upon receipt of an order for such account a written record of such order, including the account identification and order number that includes the date and time to the nearest minute when the order is received. Under relevant rules, “affiliated persons” of FCMs and IBs is broadly defined to include any general partner, director, owner of more than 10 percent, registered associated person or employee, any relative or spouse, or any relative of a spouse, who share the same home as the person directly affiliated with the relevant registrant.