Associated Person | Practical Law

Associated Person | Practical Law

Associated Person

Associated Person

Practical Law Glossary Item 6-596-1905 (Approx. 4 pages)

Glossary

Associated Person

Three variations of the term "associated person" exist:
Each variation has a different definition.
Under FINRA By-Law, Article I(rr), an "associated person of a member" or a "person associated with a member" is a natural person registered with FINRA or who has applied for registration with FINRA, including:
  • A sole proprietor, partner, officer, director, or branch manager of a broker-dealer, or other natural person occupying a similar status or performing similar functions.
  • A natural person engaged in the investment banking or securities business who is directly or indirectly controlling or controlled by a broker-dealer.
  • For purposes of FINRA examinations, investigations or proceedings, any other person listed as a direct owner or executive officer on a broker-dealer's Form BD.
An associated person of a capital acquisition broker (CAB) includes any of the above persons when acting on behalf of a CAB or in a person controlled by a CAB.
Under Section 3(a)(18) of the Exchange Act, an associated person of a broker or dealer or a person associated with a broker or dealer is:
  • Any broker or dealer employee, except those employees who perform solely ministerial or clerical functions.
  • Any partner, officer, director or branch manager of a broker or dealer, or any other person who occupies a similar status or performs a similar function.
  • Person(s) directly or indirectly controlling, controlled by, or under the common control of a broker or dealer.
For membership and registration purposes, under FINRA Rule 1011(b), an associated person is defined to include:
  • Natural person(s) registered with FINRA.
  • A sole proprietor, partner, officer, director, branch manager of the member firm, or any person occupying a similar status of performing a similar function.
  • Any company, government or political subdivision or agency or instrumentality of a government controlled by or controlling the member firm.
  • Any employee of the member firm, except those who perform solely clerical or ministerial duties.
  • Any person directly or indirectly controlling the member firm irrespective of whether the person or entity is registered or exempt from registration.
  • Any person engaged in an investment banking or securities business controlled directly or indirectly by the member firm irrespective of whether the person or entity is registered or exempt from registration.
  • Any person who will or is anticipated to fall into the categories above.
For further information, see Practice Note, Broker-Dealer Registration: Overview, Practice Note, FINRA Supervision Rules, Practice Note, Broker-Dealers: Registration and Licensing of Associated Persons and Personnel, and Practice Note, Capital Acquisition Brokers.