If an employee of a broker-dealer wants to open a brokerage account at another member firm, the employee's obligation is to: Obtain her employing firm's prior written consent and provide written notification to the executing firm
Broker-dealer employees must have their company's prior written approval before opening any outside accounts for the purpose of carrying out securities transactions.
The workers must also notify the executing firm in writing of their affiliation with another member firm before an outside account is created. However, it is not necessary to have their employer's firm's consent for each order.
A newly employed employee must acquire written permission from his employing company within 30 days of starting his work if he wishes to keep an account that he had opened previous to being linked with a broker-dealer.
In the financial services sector, a broker-dealer is a person, business, or other organization that trades securities for its own account or on behalf of its clients. Broker-dealers play a key role in the trading of derivatives and securities.
However, many other broker-dealers are divisions or subsidiaries of commercial banks, investment banks, or investment firms. Many broker-dealers are "independent" companies that simply offer broker-dealer services.
When a company executes trading orders on a client's behalf, it is said to be acting as a broker. When an institution transacts on its own behalf, it is referred to as acting as a dealer.
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