Trading Authorization

Question 1

T/F: one person is the account owner but gives others authorization for activity

Answer 1

T

Question 2

3 types of authorizations

Answer 2

limited, full, discretionary

Question 3

limited authorization

Answer 3

can trade, no withdraw

Question 4

full authorization

Answer 4

trade, withdraw

Question 5

discretionary authorization

Answer 5

rep does trading activity on behalf of customer

Question 6

is power of attorney allowed in discretionary accounts?

Answer 6

yes

Question 7

what happens to power of attorney when owner dies?

Answer 7

revoked/cancelled

Question 8

Prohibited activity when trading in discretionary accounts

Answer 8

churning

Question 9

Churning

Answer 9

violation practice of RR excessive trading to generate RR commission

Question 10

why are approvals needed for discretionaries?

Answer 10

to ensure the safety of customer accounts on other’s authorized activity

Question 11

2 requirements for RR to trade on discretionary account

Answer 11

written consent and approval

Question 12

3 requirements for RR to trade

Answer 12

asset, action, amount

Question 13

what are two things a RR can decide on for discretionaries?

Answer 13

time to buy , and price of security