Account Supervision and Approvals: Rapid Fire
Chapters in this video
- 0:00 Firms must assign every rep to a supervisor
- 1:37 OSJ vs branch office inspection cycle
- 2:52 Written supervisory procedures and who supervises Sam
- 3:54 Who approves what: options, muni, and the Series 4 trap
- 5:19 Discretionary authority vs time-and-price discretion
- 6:27 Margin agreements beyond principal approval
- 6:59 Customer-protection rule and check-drawing authority
- 7:47 ACATS transfer deadlines validated and completed
- 8:07 Pattern day trader and free-riding freeze numbers
- 9:17 SAR filing threshold and the zero-tipping-off rule
- 10:13 Prior-year $200 million enhanced supervisory control
- 10:35 Rapid-fire exam recap
What this video covers
- What "reasonably designed" actually means for a supervisory system, and why a firm can still be compliant even after a rep goes rogue
- How an Office of Supervisory Jurisdiction (OSJ) differs from a regular branch office, including the annual inspection rule and the new-account approval authority that defines an OSJ
- Why written supervisory procedures (WSPs) must name the specific individual, activity, frequency, and documentation method, and why keeping them current matters
- Who must approve each account type: registered options principal (ROP) with Series 4 for options, principal plus signed margin and hypothecation agreements for margin, and prior written discretionary authority naming an individual for discretionary trading
- The difference between time-and-price discretion (same-day only) versus full discretionary authority, and the trap of holding an order overnight
- Account transfer deadlines through the Automated Customer Account Transfer Service (ACATS): one business day for the carrying firm to validate, three business days to complete the transfer
- Rapid-fire numbers that kill points: pattern day trader minimum equity of $25,000, free-riding freeze of 90 days, suspicious activity report (SAR) threshold of $5,000 with zero tipping off, and the prior-year $200 million gross revenue trigger for enhanced supervisory controls
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