II. Associated Person

A.    Qualification

 

SRC Rule 28.1-4(5) (discussed in Chapter III, Section E.2) sets forth the qualification requirements for  applicants for the position as a firm’s Associated Person.  In addition, as discussed above, applicants:

  • Are also required to be “independent” of the firm’s business and operational functions (e.g. may not be involved in the sales and trading activities of the firm) (SRC Rule 30.2-6); and

  • May not be a salesman, agent or person whose functions are solely clerical or ministerial (Section 3.5 of the Code).

B.    Duties

 

Once appointed, the firm’s registered Association Person should have unlimited access to the information and business records of a firm to enable him to effectively perform his compliance and supervisory function. The Associated Person should have the right to question any employee of the firm regarding any conduct, business practice or ethical matter, or any other matter related to such person’s compliance with regulatory requirements and firm policies and procedures. Should the Associated Person discover any occurrence of material non-compliance by the firm with legal and regulatory requirements and/or the firm’s own policies and Procedures, the Associated Person is required under SRC Rule 30.2-6 to report such occurrence to the firm’s management (See also Chapter III, Section K.5).

 

To assist him in fulfilling his duties, the firm’s Primary Associated Person may delegate supervision to other Associated Persons employed by the firm, or the heads of other departments provided that he shall remain responsible for implementation of the firm’s compliance function.4

 

 

 

[4] See footnote 2 , supra., which provides that if a firm has more than one Associated Person, one of the Associated Persons should be designated as the Primary Associated Person.