US Legal Forms
Definitions
A
Associated Person of a Broker or Dealer

Understanding the Role of an Associated Person of a Broker or Dealer

Q: Do associated persons need to be licensed?

Yes, many associated persons must be licensed and registered with regulatory authorities, depending on their roles.

Q: What are the consequences of not complying with regulations?

Failure to comply can lead to fines, suspension, or even revocation of licenses.

Definition & meaning

An associated person of a broker or dealer refers to individuals who play significant roles within a brokerage firm. This includes:

Partners, officers, directors, or branch managers of the broker or dealer.
Individuals who have control over, are controlled by, or share common control with the broker or dealer.
Employees working for the broker or dealer.

This term is important in the context of financial regulations, as it helps define who is subject to certain legal obligations and responsibilities within the financial industry.

Table of content

Legal use & context

The term "associated person of a broker or dealer" is commonly used in securities law and regulation. It is relevant in various legal practices, including:

Compliance with securities regulations.
Enforcement actions against misconduct in the financial sector.
Licensing and registration requirements for financial professionals.

Users may encounter forms related to the registration and disclosure of associated persons when dealing with regulatory bodies such as the Securities and Exchange Commission (SEC).

Key legal elements

Real-world examples

Here are a couple of examples of abatement:

Here are a couple of examples illustrating the term:

A branch manager of a brokerage firm who oversees daily operations and has decision-making authority is considered an associated person.
A financial advisor who is employed by a broker-dealer and engages with clients on behalf of the firm also qualifies as an associated person.

Relevant laws & statutes

The primary statute governing associated persons of brokers or dealers is found in the Securities Exchange Act of 1934, specifically under 15 USCS § 78c. This statute outlines the definitions and responsibilities of associated persons in the context of securities regulation.

Comparison with related terms

Term	Definition	Key Differences
Broker	A person or firm that executes buy and sell orders on behalf of clients.	Broader term; includes all agents, while associated persons are specific roles within a firm.
Dealer	A person or firm that buys and sells securities for their own account.	Dealers engage in transactions for profit, whereas associated persons may not have direct trading authority.

Common misunderstandings

What to do if this term applies to you

If you are an associated person of a broker or dealer, it's important to understand your legal responsibilities. You should:

Ensure you are properly registered with the appropriate regulatory bodies.
Familiarize yourself with compliance requirements and ethical standards.
Consider using US Legal Forms to access templates for necessary disclosures or compliance documents.
If you have complex legal questions, consult a legal professional for tailored advice.

Find a legal form that suits your needs

Browse our library of 85,000+ state-specific legal templates.

This field is required

Quick facts

Attribute	Details
Typical Fees	Varies by firm and services provided.
Jurisdiction	Federal and state securities laws.
Possible Penalties	Fines, suspension, or revocation of licenses for non-compliance.

Key takeaways

FAQs

What qualifies someone as an associated person?

Anyone who is a partner, officer, director, branch manager, or employee of a broker or dealer qualifies as an associated person.