Flashcards in customer accounts Deck (21):
what form is required for all new accounts?
new account form
when must a copy of new account form be sent to customer to verify information?
within 30 days
how often must a firm verify account information?
every 36 months
when is a privacy notice sent to customers?
-at time account is opened
-annually after account is opened
describe a joint account
requires two or more signatures
describe a JTWROS
joint tenants with rights of survivorship
-assets divided evenly
describe a TIC
tenants in common
-assets divided per customer instructions
what do partnership agreements contain?
describe power of attorney on limited trading authorization
allows a person to trade on another persons account only.
describe power of attorney on full trading authorization
allows a person to trade and withdraw money and securities on another persons account
describe a discretionary account
registered representative is a third party
discretionary accounts must be approved by who and when?
by principal and before first trade
uniform gift to minors act
-reregistered in minor's name at age 18
uniform transfers to minors act
-reregistered in minor's name as late as age 25
gift from grandfather to kid of 1,000,000
1. who pays gift tax?
2. who pays tax on earnings?
3. who prepares taxes?
4. what tax bracket is gift taxed?
4. parents tax bracket
what happens to a customers account if they die?
1. cancel open orders
2. mark the account deceased
3/ await proper legal papers and instructions
purpose of the SIPC?
industry funded insurance
-provides coverage to customer with assets held in brokerage firm who goes bankrupt
describe coverage limits of SIPC
-$500,000 total (cash and securities)
-$250,000 cash total
-coverage per separate customer
what is not covered by the SIPC
what type of accounts are billed a single fee annually for a group of services?