Regulatory FrameworkQuestion 395 of 398
A firm discovers that one of its representatives opened a brokerage account at another member firm without notifying either firm. Under FINRA rules on accounts at other broker-dealers, the representative generally must:
a.Close the account immediately with no other obligation
b.Notify the executing firm of their association and notify their employer of the account
c.Report the account only to the SEC
d.Take no action because personal accounts are private
Explanation
Under FINRA Rule 3210, an associated person who opens an account at another firm must generally notify their employing member firm and inform the executing firm of their association. The executing firm must, upon request, send duplicate confirmations and statements to the employer. This allows firms to monitor associated persons' personal trading.
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