SIE (Training Consultants v3.5, 2025): Ch. 3 Equity Options, Sec. 12 – Option Account Regulations

Options Disclosure Document (ODD)

Also called “Characteristics and Risks of Standardized Options”; must be provided at or before account approval for options trading.

Revised ODD

Must be provided to customers by next confirmation if changes occur.

Option Worksheet

Can be sent to a customer only if preceded or accompanied by an ODD.

Option Account Approval

Account must be approved by Sales Supervisor or Registered Options Principal (ROP) before accepting any option order.

ROP Review

If initially approved by a Sales Supervisor, ROP must review within 10 business days.

Option Account Agreement

Must be received by the member firm within 15 days of account approval; agreement confirms customer will abide by exchange rules and position limits.

Liquidating Transactions

If Option Account Agreement is not returned within 15 days, only liquidating trades are allowed.

Customer Verification

Background & financial info sent within 15 calendar days of account approval; customer may correct or complete info.

Material Changes

If customer’s financial situation materially changes, updated verification info must be sent within 15 days.

What is the Options Disclosure Document (ODD)?

Document detailing characteristics and risks of options; must be given at or before account approval.

When must a revised ODD be provided?

By the time the next confirmation is sent if changes occur.

Can an options worksheet be sent without an ODD?

No, it must be preceded or accompanied by an ODD.

Who must approve an options account before accepting trades?

Sales Supervisor or Registered Options Principal (ROP).

If initially approved by a Sales Supervisor, when must the ROP review?

Within 10 business days.

When must the Option Account Agreement be returned to the firm?

Within 15 days of account approval.

What happens if the Option Account Agreement is not returned in time?

Only liquidating transactions may occur.

When must customer verification info be sent?

Within 15 calendar days after account approval.

What must be done if there’s a material change in customer’s financial situation?

Send updated verification info within 15 days. #