Account Closure Procedures

What this video covers

• Why a written request is the strongest and least-challengeable customer-initiated closure method, and how electronic and telephone requests are verified
• The four-step rep checklist after receiving a closure request: CIP and Reg S-P identity verification, review of open orders and residual cash, asset disposition via ACATS, DRS, or liquidation, and final statement delivery
• How mutual fund closures work: redemption at NAV under forward pricing with the 7-day Investment Company Act (ICA) redemption maximum
• Why variable annuity closure is a full surrender, not a simple account closure, and the three-part tax and fee bomb: CDSC, ordinary income on earnings under LIFO, and the 10% pre-age-59½ penalty
• Why a rep still owes a best-interest obligation on a recommended variable annuity surrender despite the FINRA deferred-variable-annuity rule covering only purchases, exchanges, and initial subaccount allocations
• When firm-initiated closure of inactive zero-balance accounts is permitted and why advance customer notice is required, not optional
• The senior-investor protection rule temporary hold process: why a suspicious closure request during a hold requires supervisory review, not rep or customer-service discretion
• The 6-year record retention requirement under the broker-dealer recordkeeping rule and the Municipal Securities Rulemaking Board (MSRB) municipal-records preservation rule, and why the clock starts at closure, not account opening