Net Transactions
Chapters in this video
What this video covers
- How a net transaction requires principal capacity, market maker status, an equity security, and two different prices involving another broker-dealer or customer
- Why an agency fill, a trade by a non-market maker, or a debt security does not qualify as a net transaction even when the pricing differs
- Why disclosure and customer consent must both happen prior to execution
- How non-institutional customers require written, order-by-order consent that evidences understanding of the order's terms and conditions
- How to identify institutional customers, including banks, insurance companies, registered investment companies, registered investment advisers, and persons with at least $50 million in total assets
- How the three institutional consent methods work: negative consent letter, oral disclosure and consent, and written consent
- How fiduciary status can determine the available consent method, and why the Financial Industry Regulatory Authority (FINRA) general recordkeeping default is at least six years
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