Accounts

Basic Info needed for opening new account

• name and age

• martial status and number of dependents

• estimated net worth (exclude primary residence) and liquid net worth

• estimated annual income

• employment status

• investment objectives

• investment experience

this must be kept on file for 6 yrs after acct closes

options disclosure document ODD

should receive no later than the date of principal approval, date this was given must be on new acct form

options agreement

must return no later than 15 days after account has been approved, if not received only closing transactions are permitted

US Patriot Act

verify identity with gov issued PHOTO ID (not SSN card)

CIP

must check if person is on known or suspected terrorist list. meant to detect & deter money laundering. records must be kept for 5 years

KYC

requires broker-dealers to use reasonable diligence to collect and maintain essential customer information

• customers identities

• investment histories

• investment objectives

• sources of funds

if not all info is provided, acct can still be opened, need facts necessary to:

• effectively service a customers acct

• carry out special handling instructions for the account

• understand who has trading authority on the account

• comply with securities laws, regulations, and rules

approve options accounts

BOM or ROP, if BOM is not ROP or GSSS within 10 business days they must submit decision to one of those for final word

who signs new account form

registered representative and principal. NOT customer

employee account

• prior consent from exchange or member firm (employer)

• broker-dealer must send duplicate trade confirmations to the employernstini

institutional account trading debt or foreign currency options

• evidence of authority for the institution to engage in currency option or debt option transactions in form of corporate resolution, partnership agreement, or trust agreement

• written designation of the individuals within institution authorized to execute foreign currency debt option transactions (part of corporate resolution)

• basic financial information confirming insitution

• tax ID num

discretionary options trading authority

separate from regular trading authority and needs to include

• cumulative performance history (if there is one)

• if un-established, the fact that the program is unproven

• qualifications of individuals that manage program

professional customer

• not a broker, dealer, or market maker

• places average of 390 orders per trading day for its cactus on average over a calendar month

• do not receive priority, filled after non-professional orders

• qualify for cboe customer transaction fee rebate, depending on monthly trading volume rebate ranges from 3% to 25% of total fees cboe would charge

• all professional orders must be marked as such

who approves all new options accounts

a branch office manager or registered options principal. a branch office manager who is not a ROP or GSSS can give initial approval however within 10 business days must submit decision to either of those for final approval or denial

who approves accounts that do not meet naked options criteria

a specific registered options principal. reasons for granting must be documented

what can BOM approve

approve customer options accounts and orders relating to options contracts