Discretionary Authority

What this video covers

• The three elements of discretion (asset, action, amount), and why missing any one of them makes a trade discretionary
• Why time-and-price discretion is NOT true discretion, and the critical NASA rule difference from FINRA (no same-day deadline)
• The zero-oral-authorization rule for broker-dealers and agents, and the exact three-step chronology: written authorization, firm acceptance, then first trade
• Why investment advisers get a limited grace period for verbal discretion that does NOT apply to broker-dealer agents
• How trading outside the scope of a discretionary authorization becomes unauthorized trading, even with proper paperwork on file
• What constitutes churning in a discretionary account, and why it is the hallmark violation state administrators target
• The heightened supervisory obligations for discretionary accounts: principal review, suitability checks, and written supervisory procedures