Principals
Member firms need principals who review correspondence, approve every account, initial order tickets, handle written customer complaints, and make sure there's a procedural manual for the office to use. In other words, somebody at the firm is ulti¬mately responsible for the business of the firm—that person is the principal.
FINRA says:
• • • • • • • • • • • • • •
• All Principals Must Be Registered •
• All persons engaged or to be engaged in the investment banking or •
• securities business of a member who are to function as principals •
shall be registered as such with F1NRA in the category of regis-
• •tration appropriate to the function to be performed as specified in •
• Rule 1022. Before their registration can become of ffective, they •
• shall pass a Qualification Examination for Principals appiv-
•
priate to the category of registration as specified by the Board of
• Governors. •
• • • • • • • • • • • • • •
Here is how FINRA defines a principal:
• • • • • • • • • • • •
• Definition of Principal •
• Persons associated with a member who are actively engaged in •
• the management of the member's investment banking or securities •
• business, including supervision, solicitation, conduct of business or
•
the training of persons associated with a member for any of these
• functions are designated as principals. •
• • • • • • • • • • • • • •
Also, note that, in general, each member must have at least two principals taking care of:
• New accounts
• Trades (transactions)
• Communications
• Written Customer Complaints
• Updating the Written Supervisory Procedures (WSPs)
Research Analysts
A research analyst prepares the research reports put together by a member firm. To become a research analyst, one generally must earn the Series 7 and then pass an¬other license exam specifically for research analysts (Series 86 and 87).
A supervisory analyst must approve all research reports.
• • • • • • • • • • • • • •
• Registration of Research Analysts •
• •(a) All persons associated with a member who are to function as •
• research analysts shall be registered with FINRA. •
• • • • • • • • • • • • • •
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