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Ch 4: Brokerage Account Types & Restrictions

About This Chapter

This chapter covers the types, characteristics, rules, and requirements of brokerage accounts. You'll gain a broad understanding of the FINRA Rules 4514 and 4515, learn about disclosures for day trading accounts, how to open customer investment accounts, and more.

Brokerage Account Types & Restrictions - Chapter Summary

You'll begin this chapter with a basic definition of brokerage accounts, and proceed to look at the types and characteristics of these accounts. You'll review the FINRA rules that pertain to brokerage accounts, and the CBOE rules for opening them. In addition, by the end of this chapter you will be able to:

  • Describe investment account registration types
  • Understand the requirements for opening customer investment accounts
  • Explain how to register wealth events and investment accounts, and the restrictions upon them
  • Discuss approval procedures and disclosures for day trading accounts

The lessons within this chapter allow you to complete a self-paced review of the necessary information about brokerage accounts. As you progress through each lesson, look for the key terms that our professional instructors have emphasized for you. This allows you to streamline your focus so that your study time is maximized. Another handy tool to keep you working efficiently is the progress tracking on your Dashboard.

8 Lessons in Chapter 4: Brokerage Account Types & Restrictions
Test your knowledge with a 30-question chapter practice test
Brokerage Accounts: Types & Characteristics

1. Brokerage Accounts: Types & Characteristics

What are securities accounts versus brokerage accounts? This lesson describes different types of securities accounts, securities trading methods, and securities settlement methods.

Investment Account Registration Types

2. Investment Account Registration Types

In this lesson, we will identity and describe the most common forms of investment account registration types, which identify the ownership structure of the account. This plays a critical role in assigning the ownership interest of the account.

Requirements for Opening Customer Investment Accounts

3. Requirements for Opening Customer Investment Accounts

FINRA upholds the integrity of the U.S. financial markets by designating rules for member firms. During this lesson, we will review FINRA Rule 4512, which outlines requirements for opening new investment accounts.

Wealth Events & Investment Accounts: Registration & Restrictions

4. Wealth Events & Investment Accounts: Registration & Restrictions

This lesson describes common scenarios that may fall under the definition of a wealth event. We then go through the onboarding process for these new customers and special instructions or rules to consider when developing an investment strategy.

FINRA Rule 4514: Authorization Records for Negotiable Instruments

5. FINRA Rule 4514: Authorization Records for Negotiable Instruments

The Financial Industry Regulatory Authority develops rules for regulatory investment industry practices. Rule 4514 sets standards for how investment advisers are to handle money or checks delivered from clients.

FINRA Rule 4515: Account Name or Designation Changes

6. FINRA Rule 4515: Account Name or Designation Changes

In this lesson, you will learn about the differences between investment advisors and broker dealers, as well as what information must be supplied to a brokerage firm when an order is placed.

Day Trading Accounts: Approval Procedures & Disclosures

7. Day Trading Accounts: Approval Procedures & Disclosures

This lesson covers the necessary disclosures and approvals needed to open a day trading account for a non-institutional investor. An example is also included in the beginning to provide a better context for real-world situations.

CBOE Rules for Opening Brokerage Accounts

8. CBOE Rules for Opening Brokerage Accounts

This lesson covers the required procedures for opening an options trading account and discusses why some of these rules are necessary to avoid related risk.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

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