What does it mean to be affiliated with, or have an affiliation with FINRA or a financial institution?
When you open an account with us, we’re required to confirm whether either of the following statements related to FINRA and financial institutions applies to you:
- “I work for, or am affiliated with, FINRA or a financial institution.”
- “I have, or a related person has, an affiliation with a FINRA member firm, a broker dealer, a bank, or other financial services company.”
Below are definitions to help explain these statements:
Affiliated with means any of the following work for FINRA or a financial institution:
- Your spouse
- Any member of your immediate household
- Anyone who contributes 25% or more to your annual income
FINRA is the Financial Industry Regulatory Authority.
A financial institution is defined as:
- A FINRA registered broker-dealer
- A domestic or foreign non-member broker-dealer
- An investment advisor
- A bank
- An insurance company
- A trust company
- A credit union
- An investment company
A related person is defined as:
- An immediate family member (i.e., spouse, child, sister, brother, parent, mother / father-in-law, sister/brother-in-law, daughter/son-in law);
- Any person who provided to you or received from you material support (i.e., received from you or provided to you more than 25% of annual income); or
- Someone who has the ability to control the allocation of this issuance.
Someone who has an affiliation with includes:
- An employee, associated person, officer, director, general partner or agent of a FINRA member firm or any other broker/dealer;
- A person who has authority to buy or sell securities for a bank, savings and loan institution, insurance company, investment company, investment adviser (registered or unregistered) or any other collective investment vehicle that is engaged primarily in the purchase and/or sale of securities;
- A person who owns, directly, at least 10% of a broker/dealer (other than a limited purpose broker/dealer) or at least 25% of an entity that owns at least 10% of a broker/dealer (other than a limited purpose broker/dealer);
- A person who owns, directly or indirectly, (i) at least 10% of a public reporting company that owns, directly, at least 5% of a broker/dealer (other than a limited purpose broker/dealer), or (ii) at least 25% of a public reporting company that owns at least 25% (directly or indirectly through additional intervening entities, in each of which the immediate parent owns at least 25%) of an entity that owns at least 5% of a broker/dealer (other than a limited purpose broker/dealer), in each case, other than public companies that are listed on a national securities exchange; or
A person acting as a finder or in a fiduciary capacity (including but not limited to attorneys, accountants and financial consultants) to the managing underwriter of the IPO.