Quick Answer
A firm and its associated persons may not interfere with a customer's account-transfer request merely because the customer's registered representative changed employment. The protection applies unless the account is subject to a lien for money the customer owes or another bona fide claim. Employment disputes do not override the transfer process.
Customer ownership of the transfer decision comes first. A dispute between firms or representatives does not convert the customer's request into a negotiable employment issue.
Which Customer Transfer Requests Are Protected?
- Protected customer request: A customer's transfer request that accompanies a registered representative's change in employment when the account is not subject to a lien for money owed by the customer or another bona fide claim.
- A member or associated person may not interfere with that request.
- The account-transfer rule continues to govern the processing of the transfer request.
When Is Interference Prohibited or Permitted?
| Situation | Result |
|---|---|
| Employment dispute follows a registered representative's move | Does not justify blocking the customer's transfer request. |
| Judicial order or decree sought to bar or restrict a written request tied to an employment change, when the account is not subject to a lien for money owed by the customer or another bona fide claim | Prohibited interference. |
| Account subject to a lien for money owed by the customer | May provide a permitted basis for interference. |
| Another bona fide claim applies | May provide a permitted basis for interference. |
Think of it this way: The firm cannot use a representative's employment dispute as a gate across the customer's exit. A real claim tied to the account, such as money the customer owes, is different from a dispute about where the representative works.
Exam Tip: Gotchas
- An employment dispute alone does not justify interference. It does not justify blocking a customer's account transfer.
- Account-based claims can permit interference. The tested exception is a lien for money owed by the customer or another bona fide claim, not the representative's change in employment.
What Should You Check on Exam Day?
- Confirm that the transfer request accompanies the registered representative's employment change.
- Treat a judicial effort to bar or restrict the written request as prohibited interference when the account is not subject to a lien for money owed by the customer or another bona fide claim.
- Look for a lien for money the customer owes or another bona fide claim before treating interference as permitted.
- Continue to apply the ordinary customer account-transfer process.