An associated person refers to an individual employed by a company engaged in the sale of stocks and bonds. This category encompasses managers, directors, and employees holding significant roles. However, individuals such as secretaries or janitors working for the company are not classified as associated persons. Additionally, those involved solely in paperwork or affiliated with the selling company but not directly engaged in the sale of stocks and bonds are not considered associated persons.
An associated person refers to an individual employed by a broker or dealer in the securities industry. This category encompasses various roles such as partners, officers, directors, branch managers, and other employees with similar functions or status. It also includes individuals who either control or are controlled by the broker or dealer, or those who share common control with them. However, there are two exceptions to this definition. Firstly, individuals whose roles are purely clerical or ministerial are not considered associated persons. Secondly, individuals who are obligated to register as a broker or dealer under state law solely due to their association with or as issuers of securities are not considered associated persons. For instance, a branch manager at a brokerage firm would be classified as an associated person, as would a director of a company that controls a broker-dealer. On the other hand, a receptionist whose responsibilities solely involve answering phones and greeting visitors would not be considered an associated person.
An Associated Person, also known as an AP, is an individual who is employed by a registered broker-dealer or futures commission merchant (FCM) and is involved in the solicitation, handling, or execution of orders for the purchase or sale of commodities or securities.
To become an Associated Person, one must pass the required regulatory exams, such as the Series 3 exam for commodities or the Series 7 exam for securities. Additionally, they must meet any other specific qualifications set by the regulatory authorities.
Associated Persons have various responsibilities, including soliciting customers, executing trades, providing investment advice, maintaining accurate records, and complying with all applicable laws and regulations.
Yes, Associated Persons are required to be registered with the appropriate regulatory authorities, such as the Financial Industry Regulatory Authority (FINRA) for securities or the National Futures Association (NFA) for commodities.
Yes, an Associated Person can work for multiple broker-dealers or FCMs, but they must be separately registered with each entity they work for.
Failure to register as an Associated Person can result in severe penalties, including fines, suspension, or even permanent bar from the industry. It is essential to comply with all registration requirements.
Yes, Associated Persons can provide investment advice, but they must do so within the scope of their registration and comply with all applicable regulations, including disclosing any conflicts of interest.
Yes, Associated Persons are required to complete continuing education courses periodically to stay updated on industry developments, regulatory changes, and best practices.
Yes, an Associated Person can be held liable for misconduct, such as fraud, misrepresentation, or unauthorized trading. They are expected to act in the best interest of their clients and comply with all applicable laws and regulations.
Yes, if an Associated Person engages in serious misconduct or repeatedly violates regulatory rules, their registration can be revoked, resulting in a permanent ban from the industry.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
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