Welcome to Customer Agreements and Account Types: the unit covering the rules for how firms open, document, and manage customer accounts, from basic cash accounts through margin and options trading.
Exam Weight: Part of Communication with Customers and Prospects (20%, 12 questions)
What You'll Learn
In this unit, you'll cover:
- Unlawful Representations: Why registration never equals approval under the USA
- Performance Guarantees Prohibition: The line between describing product features and making prohibited guarantees
- New Account Requirements: What the firm documents, who approves a new account, and the trusted-contact request
- Margin Accounts: The margin agreement and risk disclosure a customer must receive before trading on margin
- Options Accounts: ODD delivery, principal approval, and the 15-day signed-agreement rule
Why This Matters
How firms open and document customer accounts sits at the intersection of state law and customer protection. The Series 63 exam tests the state-law pieces: the prohibition on representing that registration means approval, the line between describing a product feature and guaranteeing performance, the trusted-contact and vulnerable-adult protections, and the documentation required to open cash, margin, and options accounts.
Let's start with the rule that registration never equals approval.