The Securities and Exchange Commission has approved a new rule of the Financial Industry Regulatory Authority that prescribes requirements related to securities accounts established by associated persons at broker-dealers other than with their employer. In general, the new rule requires advance written consent to maintain such accounts, and obligates the non-employer, upon request, to provide account statements or transactional data regarding such accounts to the associated person’s employer. The objective of the new rules, which consolidate various prior rules, is to facilitate oversight of such accounts by associated persons’ employers.
My View: The National Futures Association should consider adopting a similar rule to govern futures accounts opened at futures commission merchants other that a registrant’s own employer. This would enable an FCM to better monitor any potential wrongdoing by its employees that might be harming its customers (e.g., trading ahead) or to the FCM itself.
