Definition of an Agent of a Broker-Dealer
Chapters in this video
- 0:00 Is Aaron the failed cold-caller an agent
- 1:25 Three ingredients: individual, represent, effect or attempt
- 1:58 Agent versus dealer: Aaron acts for Betty
- 2:24 Title trap: compliance officer versus cold-calling intern
- 3:07 Non-agent activities: bookkeeping to marketing support
- 4:02 Failed trade, cat on keyboard, still an agent
- 5:08 Partners, officers, and directors: no automatic status
- 5:47 Broker-dealer automatic registration shortcut versus issuer trap
- 6:45 Rapid-fire exam recap
What this video covers
- The three-part statutory definition of an agent: individual (natural person), represents a broker-dealer or issuer, and effects or attempts to effect securities transactions
- Why the mere attempt to solicit, recommend, or execute a trade triggers agent status even when no sale is completed
- The critical distinction between an agent (acts on behalf of another) and a dealer (trades for its own account)
- Why fancy titles like chief compliance officer or vice president do not confer agent status without actual transactional duties
- Which activities do not trigger agent status: bookkeeping, clerical work, back-office settlement, IT, and marketing support functions
- The automatic registration shortcut for partners, officers, and directors of a broker-dealer who qualify as agents, and why Form U4 is not required
- The trap of applying that same automatic registration shortcut to issuers, and why issuers' partners, officers, and directors must still file separately
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