Function 2: Opens Accounts After Obtaining and Evaluating Customers’ Financial
Profile and Investment Objectives
2.1 Informs customers of the types of accounts and provides disclosures regarding various
account types and restrictions
Knowledge of:
• Types of accounts (e.g., pattern day trading, prime brokerage, delivery verses payment/receive versus
payment (DVP/RVP), advisory or fee-based)
• Account registration types (e.g., tenants in common (TIC), community property, sole proprietorship,
partnership, unincorporated associations)
• Requirements for opening customer accounts
• Retirement plans and other tax advantaged accounts
 Transfers, rollovers, eligibility, distribution strategies and taxation (e.g., types of allowable contributions,
distribution options, taxation of distribution at retirement, age restrictions for distributions, permissible
investments)
 Employer-sponsored plans and ERISA (e.g., 457, defined benefit, profit-sharing, stock options and
stock purchase, non-qualified deferred compensation programs)
• Wealth events (e.g., inheritance)
• Account registration changes and internal transfers
FINRA Rules
2270 – Day-trading Risk Disclosure Statement
2130 – Approval Procedures for Day-trading Accounts
4512 – Customer Account Information
4514 – Authorization Records for Negotiable Instruments Drawn from a Customer’s Account
4515 – Approval and Documentation of Changes in Account Name or Designation
Cboe Rule
9.1 – Opening of Accounts
Internal Revenue Code
219 – Retirement Savings
415 – Limitations on Benefits and Contributions Under Qualified Plans
529 – Qualified Tuition Programs
530 – Coverdell Education Savings Accounts
Employee Retirement Income Security Act of 1974 (ERISA)
2.2 Obtains and updates customer information and documentation, including required legal
documents and identifies and escalates suspicious activity
Knowledge of:
• Customer screening (e.g., customer identification program (CIP), know-your-customer (KYC), domestic or
foreign residency and/or citizenship, corporate insiders, employees of broker-dealers or self-regulatory
organizations (SROs))
• Information security and privacy regulations (e.g., initial privacy disclosures to customers, opt-out notices,
disclosure limitations, exceptions)
Series 7
7
• Account authorizations (e.g., power of attorney (POA), trust documents, corporate resolutions, trading
authority, discretionary account documents)
FINRA Rule
408T – Discretionary Power in Customers’ Accounts
2090 – Know Your Customer
3260 – Discretionary Accounts
SEC Rules and Regulations
Securities Exchange Act of 1934
Section 3(a)(35) – Definitions and Application of Title – “Investment Discretion”
Regulation S-P – Privacy of Consumer Financial Information and Safeguarding Personal Information
Cboe Rule
9.4 – Discretionary Accounts
2.3 Makes reasonable efforts to obtain customer investment profile information including, but
not limited to, the customer’s other security holdings, financial situation and needs, tax
status and investment objectives
Knowledge of:
• Essential facts regarding customers and customer relationships
• Financial factors relevant to assessing a customer’s investment profile
 Security holdings, other assets and liabilities, annual income, net worth, tax considerations
 Other considerations (e.g., age, marital status, dependents, employment, investment experience, home
ownership and financing, employee stock options, insurance, liquidity needs)
• Investment objectives (e.g., preservation of capital, income, growth, speculation)
• Reasonable-basis, customer-specific and quantitative care obligations
• Investment strategies and recommendations to hold
• Verification of investor accreditation and sophistication
FINRA Rules
2111 – Suitability
2214 – Requirements for the Use of Investment Analysis Tools
SEC Rules and Regulations
Securities Act of 1934
15l-1 – Regulation Best Interest
MSRB Rule
G-19 – Suitability of Recommendations and Transactions
2.4 Obtains supervisory approvals required to open accounts
Knowledge of:
• Required review, approvals and documentation for account opening and maintenance
• Physical receipt, delivery and safeguarding of cash or cash equivalents, checks and securities
• Circumstances for refusing or restricting activity in an account or closing accounts
FINRA Rules
Series 7
8
3110 – Supervision
3120 – Supervisory Control System
Cboe Rule
9.2 – Supervision of Accounts
MSRB Rule
G-27 – Supervision…(read more)

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In the world of customer accounts, Episode 9 of the Series Exam Podcast takes a deep dive into the intricacies of managing customer accounts effectively. This episode covers crucial topics such as building customer relationships, enhancing customer experience, and streamlining communication processes.

One of the key themes discussed in this episode is the importance of establishing strong relationships with customers. By understanding their needs, preferences, and pain points, businesses can tailor their services to provide a personalized and memorable experience. This not only helps in building trust and loyalty but also leads to increased customer retention and satisfaction.

Another important aspect touched upon in this episode is the significance of enhancing customer experience. From providing seamless onboarding processes to offering round-the-clock support, businesses need to prioritize the satisfaction of their customers at every touchpoint. By investing in technology and tools that can streamline and automate various processes, businesses can ensure a hassle-free experience for their customers.

Communication is also a critical factor in managing customer accounts effectively. Clear and timely communication can help in resolving issues, addressing concerns, and keeping customers informed about important updates. By leveraging various communication channels such as emails, phone calls, and live chats, businesses can ensure that customers are always kept in the loop.

Overall, Episode 9 of the Series Exam Podcast serves as a valuable resource for businesses looking to enhance their customer account management strategies. By focusing on building relationships, enhancing customer experience, and improving communication processes, businesses can strengthen their customer accounts and drive long-term success.