Series 7: 17.5.3.3. Error Accounts

17.5.3.3. Error Accounts

Error accounts are used when someone at a firm makes an error that the firm will need to cover. Examples include when a firm purchases the wrong amount of a security or the wrong security for a customer, or if the customer ordered the wrong security and the firm agrees to cover the error for the customer. The purpose of an error account is to organize and track errors and resolve them quickly and efficiently. A principal at the firm must approve any changes made in an error account before they are officially made, and all such changes must be documented.

Error accounts cannot be used for proprietary trading or other trading unrelated to identified errors.