About This Chapter
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.
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.
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.
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.
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.
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.
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.
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.
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.
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Other chapters within the Series 7 Exam: Study Guide & Practice course
- Advertising & Public Communication in the Securities Industry
- The New Issues Market
- New Issue Regulations in the Securities Industry
- Retirement Plans & Tax-Advantaged Accounts
- Handling Customer Investment Information & Discretionary Accounts
- Obtaining Supervisory Approvals for Investment Accounts
- Analyzing Customer Investment Profiles
- Analyzing Customer Financial Statements
- Understanding Equity Securities
- Tax Treatment of Equity Securities Transactions
- Packaged Investment Products
- Variable Life Insurance & Annuities
- Real Estate Investment Trusts
- Direct Participation Programs
- Understanding Options in Investing
- Debt Securities
- Investing in Corporate Bonds
- Municipal Securities
- Municipal Securities Analysis & Regulations
- Registered Hedge Funds
- Asset-Backed Securities
- U.S. Government Agency Securities
- Investment Product Disclosures
- Customer Updates & Record Retention
- Customer Transactions & Confirmations
- Transactional Delivery Obligations & Settlement Procedures
- Investment Disputes & Customer Complaints
- Addressing Margin Issues