Interfering With a Customer's Account Transfer

This account-transfer interference rule protects the customer's choice, not the departing representative's book of business or the firm being left behind. It is separate from any notice a new firm owes a representative's former customers, which this course covers elsewhere.

What Does the Account-Transfer Interference Rule Prohibit?

• No member or associated person may interfere with a customer's request to transfer the customer's account when that request follows a change in the employment of the customer's registered representative.
• The rule protects the customer's own decision about where the account goes. It does not give the departing representative, the old firm, or the new firm a say in whether the transfer happens.

What Counts as Interference?

• Prohibited interference includes, but isn't limited to, seeking a judicial order or decree that would bar or restrict the submission, delivery, or acceptance of the customer's written transfer request.
• The list is illustrative, not exhaustive. Any action that blocks or restricts the customer's transfer request can qualify, not only a court filing.

When Can a Firm Legitimately Delay a Transfer?

• The prohibition does not apply if the account is subject to a lien for monies the customer owes, or another bona fide claim.
• A genuine lien or claim is the only recognized exception. It has to be real, not asserted only to slow the transfer down.
• The rule's closing sentence adds one more thing: nothing in it affects the operation of FINRA's own account-transfer rule. That separate rule lets a carrying firm take exception to a transfer instruction on stated grounds, such as needing more documentation or an account title that does not match its records. Using one of those grounds is not interference under this rule.

Exam Tip: Gotchas

• The only exception is a genuine lien or bona fide claim against the account. A firm cannot invent a pretext to delay a transfer request after a representative changes firms.

What Should You Check on Exam Day?

• Confirm the transfer request follows a change in the representative's employment before applying this rule.
• Treat "seeking a judicial order" as one example of interference, not the only prohibited act.
• Require a genuine lien or bona fide claim before accepting any delay as legitimate.
• Remember the rule protects the customer's choice, not any party's interest in keeping or gaining the account.
• Do not read this rule as overriding the account-transfer rule. Its last sentence says it leaves that rule's operation alone.