What is the rule 721 for FINRA?
Asked by: Sydni Grimes IV | Last update: May 30, 2025Score: 4.4/5 (54 votes)
No member or member organization shall accept an order from a customer to purchase or write a stock-related option contract, Government security option contract, or GNMA option contract unless the customer's account has been approved for options trading in stock-related options, Government security options, and GNMA ...
What are the three main suitability obligations of FINRA rule 2111?
Rule 2111 is composed of three main obligations: reasonable-basis suitability, customer-specific suitability, and quantitative suitability.
Who does FINRA Rule 3310 apply to?
The Bank Secrecy Act, among other things, requires financial institutions, including broker-dealers, to develop and implement AML compliance programs. Members are also governed by the anti-money laundering rule in FINRA Rule 3310. FINRA Rule 3310 sets forth minimum standards for broker-dealers' AML compliance programs.
Can FINRA put people in jail?
FINRA itself cannot send a person to jail.
What is the fiduciary duty rule of FINRA?
You cannot use your clients' assets for your own benefit or the benefit of other clients, at least without client consent. Departure from this fiduciary standard may constitute “fraud” upon your clients. As an investment adviser, you are a “fiduciary” to your advisory clients.
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What are the three fiduciary duties?
When individuals agree to serve as board members, they take on fiduciary responsibilities that statutory and common law require. Specifically, they have to comply with three fiduciary duties: care, obedience and loyalty.
What is the finra rule 2090?
Every member shall use reasonable diligence, in regard to the opening and maintenance of every account, to know (and retain) the essential facts concerning every customer and concerning the authority of each person acting on behalf of such customer.
What crimes disqualify you from FINRA?
Some events that may cause an individual to be subject to statutory disqualification include an SEC or SRO bar from association with a broker-dealer, all felony convictions and certain misdemeanor convictions within the last ten years, certain investment-related temporary or permanent injunctions, as well as a variety ...
What is the 10 day rule for FINRA?
The following retail communications must be filed at least 10 business days prior to first use or publication: retail communications of new member firms used in any electronic or public media for one year beginning on the date the firm's FINRA membership becomes effective, as reflected in the CRD system.
What triggers a FINRA investigation?
FINRA investigations may be opened from various sources, including automated surveillance reports, examination findings, filings made with FINRA, customer complaints, tips, referrals from other regulators or other FINRA departments and press reports. As a policy, FINRA's investigations are confidential.
What is the rule 313 for FINRA?
Designation of Chief Compliance Officer. Each capital acquisition broker must designate and specifically identify to FINRA on Schedule A of Form BD one or more principals to serve as a chief compliance officer.
Who Cannot be a FINRA member?
(a) No registered broker, dealer, municipal securities broker or dealer, or government securities broker or dealer shall be admitted to membership, and no member shall be continued in membership, if such broker, dealer, municipal securities broker or dealer, government securities broker or dealer, or member fails or ...
What is the FINRA rule 2070?
Transactions Involving FINRA Employees. (a) When a member has actual notice that a FINRA employee has a financial interest in, or controls trading in, an account, the member shall promptly obtain and implement an instruction from the employee directing the member to provide duplicate account statements to FINRA.
What is the rule 134 in FINRA?
(i) No member shall be permitted to effect transactions on the Floor unless such member: (a) maintains an error account at a registered broker or dealer in his or her name, or in the name of his or her member organization; or (b) such member participates in an error account established for a group of members ( "group ...
What is the FINRA rule 2080?
FINRA Rule 2080 provides that FINRA may waive the obligation to name FINRA as an additional party if FINRA determines that the expungement relief is based on affirmative judicial or arbitral findings.
What is FINRA Rule 13801?
The arbitrator may not award damages in an amount greater than the damages requested in the statement of claim, and may not award any other relief that was not requested in the statement of claim. (2) The default award shall have no effect on any non-defaulting party.
What is the 2 year rule for FINRA?
When you terminate your registration with FINRA, you remain subject to FINRA's jurisdiction for at least two years. For example, you may be asked to provide information, documentation or to testify on the record during a FINRA examination or investigative process.
What is the FINRA 5% rule?
The five percent rule is a stipulation of the Financial Industry Regulatory Authority (FINRA), which oversees brokers and brokerage firms in the U.S. Dating back to 1943, it stipulates that a broker shouldn't charge commissions, markups, or markdowns of more than 5% on standard trades, both stock exchange listings and ...
What is the 25000 rule for FINRA?
of Rule 4210 specifies that the minimum equity required for the accounts of customers deemed to be pattern day traders shall be $25,000. The rule provides that this minimum equity must be deposited in the account before the customer may continue day trading and must be maintained in the customer's account at all times.
What is the FINRA red flag rule?
The Red Flags Rule requires specified firms to create a written Identity Theft Prevention Program (ITPP) designed to identify, detect and respond to “red flags”—patterns, practices or specific activities—that could indicate identity theft.
How far back does FINRA Broker check go?
A BrokerCheck report for an individual who meets any of these criteria will typically include the same information categories as outlined above for individuals registered within the last 10 years.
Can FINRA send you to jail?
For securities professionals, that includes the licenses and certifications that are required to work in the field, though FINRA can also impose civil penalties for securities violations. FINRA does not have the authority to send someone to jail or prison for violating securities law.
What is FINRA Rule 420?
Each general partner of a member firm shall promptly report to the Exchange any secured or unsecured borrowing of cash or securities regardless of its amount or description where the cash proceeds of such borrowing or the securities borrowed will be contributed to the capital of the member firm under Rule 104 .
What is the FINRA rule 611?
In particular, for purposes of the information provided in this Notice, Regulation NMS includes the Order Protection Rule (SEC Rule 611), which requires trading centers to establish, maintain and enforce written policies and procedures reasonably designed to prevent the execution of trades at prices inferior to ...
What is the FINRA rule 352?
(a) No member organization shall guarantee or in any way represent that it will guarantee any customer against loss in any account or on any transaction; and no member, principal executive, registered representative or officer shall guarantee or in any way represent that either he or she, or his or her employer, will ...