Quick Answer
Six items belong on every account record, three more are owed on reasonable efforts before the first trade settles, and an institutional account skips several of them. An arbitration clause carries seven disclosure points and two delivery clocks. A retirement plan account adds four fiduciary duties and a 25% plan assets test.
What the paperwork must hold, who signs it, how long it is kept, and what a retirement plan changes.
Which One-Liners Win Points?
- Institutional account: a bank, savings and loan association, insurance company, registered investment company, or registered investment adviser qualifies on status alone; anyone else needs $50 million in total assets. It skips the responsible-associated-person record, the trusted contact, and the reasonable-efforts information.
- Six required record items: name and residence, legal age status, the responsible associated person or persons, a principal's acceptance signature, an entity's authorized persons, and a trusted contact aged 18 or older.
- Three reasonable-efforts items, owed before the initial transaction settles: tax identification number, occupation and employer, and associated-person status at another member. Unrecommended open-end fund accounts are exempt too.
- A discretionary account needs the dated signature of each associated person authorized to exercise discretion. Price-or-time discretion over an already-chosen security and amount does not count.
- An arbitration clause is highlighted and preceded by the prescribed seven-point disclosure, with a highlighted statement above the signature line naming its location. It may never limit a self-regulatory organization's rules, arbitration access, a permitted court claim, or the arbitrators' award power.
- Employee Retirement Income Security Act (ERISA) fiduciary: discretionary control over the plan, any authority over plan assets, advice for a fee, or discretionary administration. The four duties are exclusive purpose, prudence, diversification, and plan documents. A party-in-interest transaction needs an exemption.
Which Numbers Matter Most?
| Item | Value |
|---|---|
| Account information retention | 6 years from an update, or from closing |
| Arbitration copy: unprompted, then on request | 30 days, then 10 business days |
| Plan-assets threshold | 25% of an equity class |
Which Gotchas Trip Students Up?
- No trusted contact on file does not block the account; reasonable efforts to obtain the name is the duty.
- The principal's signature shows acceptance under firm policy, and naming the responsible associated person does not discharge supervision.
- The six-year clock runs from the update, not from account opening. Maintain covers the record in use, preserve the one it replaced.
- An internal reassignment to a different associated person is itself a recordkeeping event, and a legacy account comes current at its next update.
- The class-action carve-out lifts once certification is denied, the class decertified, or the customer excluded, and compelling arbitration is all or nothing.
- Government and church plans sit outside ERISA absent an election, and the 25% plan-assets test measures a class of equity interest, not the offering's size.
One-Breath Recap
Every account record holds six items, three more are owed on reasonable efforts before the initial transaction settles, and an institutional account, defined by status or by $50 million in assets, skips several. Updated information is kept six years from the update, unchanged information six years after closing. An arbitration clause needs the seven-point disclosure, a highlighted pointer above the signature line, and delivery within 30 days unprompted or 10 business days on request. A retirement plan adds four fiduciary duties and the 25% plan-assets test.
Need more than the recap? Read the full Account Opening Requirements unit.