Start a Broker/Dealer
All you need to know about starting a FINRA registered Broker/Dealer


Glossary


Anti-Money Laundering (AML) – term used to describe the legal controls that require financial institutions and other regulated entities to prevent or report money laundering activities

 

Bank Secrecy Act (BSA) – also known as the Currency and Foreign Transactions Reporting Act; requires financial institutions in the United States to assist government agencies in detecting and preventing money laundering

 

Blue Sky Laws – laws enacted by states that regulate the offering and sale of securities to protect the public from fraud

 

Financial and Operations Principal (FINOP) – registered with FINRA, a FINOP is responsible for filing financial reports

 

Financial and Operational Combined Uniform Single (FOCUS) Reports – periodically filed by broker/dealers with the SEC and contains detailed information about a firm's financial and operational status

 

Foreign Corrupt Practice Act – enacted in the 1970's to prevent American business from bribing foreign officials for favorable treatment

 

Form NMA – form for new member application to FINRA

 

Form X-17a-5 – financial and operational report form that must be completed by all SEC-registered broker/dealers

 

Registered Principal – licensed securities dealer who is empowered to oversee operational, compliance, trading, and sales operations and the personnel who staff them

 

Sarbanes-Oxley Act – passed by Congress in 2002, this act regulates accounting activities by corporations in order to protect investors from fraudulent accounting activities

 

Series 27 – securities license that entitles the holder to become a CFO or an unlimitied FINOP for a FINRA member firm

 

Series 63 – securities license that entitles the holder to solicit orders for securities in a particular state

 

Troubled Asset Relief Program (TARP) Act – enabled financial institutions to sell troubled assets and securities to the United States government

 

U4 Form – the Uniform Application for Securities Industry Registration or Transfer; representatives of broker/dealers, investment advisors, or issuers of securities use this form to become registered in the appropriate jurisdiction

 

10b-5 (Securities Fraud) – rule from the Securities Exchange Act of 1934 that specifically prohibits making any false statements or omissions in connection with the sale or purchase of securities

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