I work for a FINRA firm, but put some money in another company's mutual fund.?
Today I opened an Investment Account with ING for a small real estate allocation ($1,000 in their Global Real Estate fund)..
Why did they ask me if I work for a FINRA firm (I do)? Does this matter? I know I have to complete a form listing my transactions every quarter, but I thought that was for stocks only, not mutual funds…..
Can anyone shed some light on this?
rule 407 requires that an associated person notify their employer about any outside accounts. Typically, approval for the account will be granted by your employer if it is for mutual funds only. Your employer has the right to require ING provide duplicate statements to them, but it is unlikely for a mutual fund inbvestment company. ING wants to be certain they are playing with the rules, so they ask. You will need to have your compliance dept send ING a "407 letter" indicating approval to maintain the account.
Homer | Apr 21, 2008
The FINRA question should have been on your new account application. This is mainly due to the requirement of a 407 letter which is what you would need if your are employed by a FINRA member firm. The 407 letter is from your firm giving their permission to maintain a securities account at another firm. The reason being is that your firm that you are employed by is required to monitor your trading activity nomatter what firm you are trading at.
You will have to disclose your outside account at ING to your firm and they can allow or disallow you maintain this outside account. The reason it is normally disallowed is because it is expensive for your firm to monitor your trades in an outside account as they will have to receive and review duplicate statements for your account (normally, sometimes the account holding firm will provide this notification electronically to the member firm).
Your firm’s compliance department can take this seriously at times. If you contact your firm’s compliance department before they contact you, they will usually let you know what you will have to do to abide by finra and your firm’s regulation without penalty.
manny c | Apr 21, 2008
Add comment October 30th, 2009