Member firms will seek to increase their business and exposure through the use of both retail and institutional communications. There are strict regulations in place in order to ensure all communications with the public adhere to industry guidelines. Some communications with the public are available to a general audience and include:
Other types of communications are offered to a targeted audience. These communications include:Read more
Guidelines for the practices that a brokerage firm uses to conduct the operation of its daily business are regulated by industry, state, and federal regulators. These guidelines are the foundation for the way that the firm handles all business, from hiring a new agent to executing a customer’s order. All candidates must have a full understanding of a brokerage firm’s operations and procedures to successfully complete the exam.
A registered principal of a firm will be the individual who interviews and screens potential new employees. They will be required to make a thorough investigation into the candidate’s professional and personal backgrounds. With few exceptions other than clerical personnel, all new employees will be required to become registered as an associated person with the firm. The new employee will begin their registration process by filling out and submitting a Uniform Application for Securities Industry Registration, also known as Form U4. The Form U4 is used to collect the applicant’s personal and professional history including:Read more
All broker dealers are required to prepare and maintain reports and records according to industry regulations. The content and timing of the reports depends on the nature of the report. SEC Rules 17 a-3 and 17 a-4 set forth the requirements for broker dealer reporting, timing, content, and retention. Records subject to these rules must be maintained anywhere from three years to the life of the firm.
Under SEC Rule 17a-3 a significant number of records must be filed and maintained by broker dealers. The following is a list of those records and their definitions:
Blotters are records of original entry and must reflect transactions as of the trade date. Blotters must be prepared no later than the following business day, or T + 1. This would include a historical account of all the daily transactions, such as:Read more
All members are required to have a policy and procedures manual that outlines the supervisory structure of the firm and designates a principal to be responsible for each area of supervision. All firms are required to have a written policy and procedures manual to ensure compliance with the firm’s rules as well as the rules of the industry. The manual must be updated to reflect the adoption of new policies, a change in personnel, or new industry rules.
Prior to any firm being admitted as a member of FINRA, they must have a least two principals to supervise the activities of the firm. At a minimum, one must be a principal to supervise employees and the other must be a financial operations principal, or FINOP, to supervise the financial and operational activities of the firm. It is the principal’s responsibility to ensure that all rules in the policy and procedures manual are followed by the firm’s employees. It is the responsibility of the principal to review and approve all of the following:Read more