Limits on Accounts of Employees of Other Municipal Securities Dealers
Municipal securities dealers are not permitted to open or maintain municipal securities accounts in which transactions are made for a customer who is employed by another broker-dealer unless they first give written notice to the customer’s firm. Thus, prior written notice must be given, but prior approval from the customer’s firm is not necessary.
This rule also applies to customers who are the spouses or minor children of someone employed by another broker-dealer. However, a dealer need not question each customer about whether they are closely related to someone employed by another broker-dealer. The rule only applies if the dealer actually knows that the customer is married to or the minor child of someone employed by another broker-dealer.
For each transaction in such an account, the dealer must simultaneously deliver a duplicate copy of each customer confirmation to the customer’s employing firm and follow any of that firm’s written instructions for such accounts.
Note that firms do not have to provide notification when customers open accounts that are limited to transactions in municipal fund securities.
MSRB Rule G-28
Exercise
Answer true or false.
- 1. True or false: The only required signatures on a “plain vanilla” new client account form are those of the r