Understanding the Concept of Associated Person in Legal Terms
Definition & meaning
The term associated person refers to any individual who is connected to specific financial entities in a professional capacity. This includes roles such as partners, officers, employees, or agents of futures commission merchants, introducing brokers, commodity pool operators, commodity trading advisors, and leverage transaction merchants. An associated person typically engages in activities like soliciting or accepting orders from customers or overseeing individuals who perform these tasks.
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Associated persons are commonly referenced in the context of financial regulations, particularly those governing the trading of commodities and securities. This term is crucial for compliance with laws set forth by the Commodity Futures Trading Commission (CFTC). Individuals in these roles may need to complete various forms and adhere to specific procedures to ensure they are operating within legal guidelines. Users can manage some of these processes using legal templates provided by US Legal Forms.
Key Legal Elements
Real-World Examples
Here are a couple of examples of abatement:
Example 1: A person working as a partner in a futures commission merchant who solicits orders from clients is considered an associated person.
Example 2: An employee of a commodity trading advisor who manages client accounts and oversees junior staff is also classified as an associated person.
Relevant Laws & Statutes
The definition of associated person is primarily governed by regulations outlined in 17 CFR 1.3, which is part of the Commodity Exchange Act. This act provides the framework for the regulation of commodity futures and options markets.
Comparison with Related Terms
Term
Definition
Key Differences
Registered Representative
An individual authorized to sell securities on behalf of a broker-dealer.
Focuses on securities rather than commodities and may have different regulatory requirements.
Broker
A person or firm that arranges transactions between a buyer and a seller.
Broader term that may include various roles beyond those of associated persons.
Common Misunderstandings
What to Do If This Term Applies to You
If you believe you qualify as an associated person, ensure you understand the regulatory requirements that apply to your role. It may be beneficial to consult with a legal professional to ensure compliance. Additionally, explore US Legal Forms for templates that can assist you in managing your responsibilities effectively.
Quick Facts
Attribute
Details
Typical Roles
Partner, officer, employee, agent
Regulatory Body
Commodity Futures Trading Commission (CFTC)
Compliance Requirement
Must adhere to 17 CFR 1.3 regulations
Key Takeaways
FAQs
An associated person is an individual connected to financial firms in roles that involve soliciting or supervising customer orders.
No, only those in specific roles that involve customer interaction or supervision qualify as associated persons.
Associated persons must comply with regulations set forth by the Commodity Futures Trading Commission, particularly 17 CFR 1.3.
