FINRA Rule 3210: Accounts at Other Broker-Dealers

Quick Answer

An agent needs the employer BD's prior written consent before opening or keeping a securities account at another firm, and must tell the executing firm in writing about the employer relationship. The rule reaches accounts a spouse, dependent child, or controlled third party holds, not just the agent's own name.

Once an agent is registered, FINRA layers on rules about the agent's own trading activity. One rule controls where an agent can hold outside securities accounts.

An agent (an "associated person") may not open or maintain a securities account at another broker-dealer or other financial institution without the prior written consent of the employer BD (the "employer member").

  • Before opening the account, the agent must also notify in writing the firm or institution where the account will be held (the "executing member") of the agent's association with the employer BD
  • The rule covers any account "in which securities transactions can be effected," so it reaches brokerage accounts at banks, insurance companies, and other broker-dealers, not just other FINRA member firms

Exam Tip: Gotchas

Consent must come before the account opens, and it must be written. A verbal heads-up to a supervisor does not satisfy the rule.

Whose Accounts Does the Rule Cover?

The rule reaches any account in which the agent has a beneficial interest. FINRA presumes that interest exists for accounts held by:

  • The agent's spouse
  • A child of the agent or the agent's spouse, if the child resides in the same household as the agent or is financially dependent on the agent (this is not limited to minor children)
  • Any other related individual over whose account the agent has control
  • Any other individual over whose account the agent has control and to whom the agent materially contributes financial support

The presumption for a spouse's or child's account can be rebutted if the agent shows, to the employer's reasonable satisfaction, that the agent gets no economic benefit from the account and exercises no control over it.

Exam Tip: Gotchas

The rule is not limited to accounts titled in the agent's own name. A spouse's account, a financially dependent adult child's account, or any account the agent actually controls all count, even if the agent's name never appears on it.

What if the Account Already Existed?

If the agent already held the account before joining the employer firm, the agent has 30 calendar days from becoming associated with the firm to obtain the employer's written consent and notify the executing institution in writing.

What Can the Employer Firm Request?

The employer BD may request duplicate copies of confirmations and account statements (or the underlying transactional data) from the executing member. The executing member must comply with a written request.

If the outside account sits at a non-member financial institution rather than another FINRA member, the employer must first consider whether it will actually be able to obtain those duplicate confirmations and statements on request before deciding whether to give its consent.

What Accounts Fall Outside the Rule?

The rule does not apply to transactions or accounts limited to:

  • Unit investment trusts
  • Municipal fund securities
  • 529 college savings plans
  • Variable contracts or redeemable investment-company securities (mutual funds)
  • Monthly Investment Plan accounts
  • Coverdell education savings accounts

Exam Tip: Gotchas

An agent who holds only a 529 plan or a mutual fund account elsewhere does not need employer consent for it. The consent requirement targets accounts where the agent could actively trade securities, not these narrow, largely passive vehicles.

What Should You Check on Exam Day?

  • Prior written consent from the employer BD is required before opening an outside securities account
  • The agent must also notify the executing firm in writing of the employer relationship
  • Coverage extends to a spouse's account, a dependent or same-household child's account, and any account the agent controls
  • A pre-existing account gets 30 calendar days to come into compliance after the agent joins the firm
  • The employer BD can demand duplicate statements and confirmations from the executing firm, and must weigh whether it can actually get them before consenting to an account at a non-member institution
  • 529 plans, mutual funds, variable contracts, and similar accounts are excluded from the rule entirely