Account Information) to permit the use of electronic signatures and to clarify the scope of. 7 6 See proposed FINRA Rule 2273(a). Customer Confirmations ›. Financial Exploitation of Specified Adults. Records of Written Customer Complaints. 7 Rule 5123 requires members to file with FINRA any PPM, term sheet or other offering FINRA Rule 4512 (a) (1) (F) (Customer Account Information) requires firms, for each of their non-institutional customer accounts, to make a reasonable effort to obtain the name and contact information for a trusted contact person (TCP) age 18 or older. Approval Procedures for Day-Trading Accounts ›. 8 See FINRA Rule 2111. A member firm may use its discretion in relying on any information provided by the trusted contact. For example, FINRA Rule 4512 defines “institutional accounts” to be a: Bank, insurance or investment company; Jan 5, 2021 · In particular, although the definition of “institutional account” set forth in Rule 4512(c) of the Financial Industry Regulatory Authority, Inc. 12 See FINRA Rules 2215 (Communications with the Public Regarding Security Futures) and 2220 (Options Communications). FINRA Rule 4512 (Customer Account Information) requires firms to make reasonable efforts to obtain the name of and contact information for a trusted contact person upon the opening of a Aug 7, 2023 · FINRA Rule 2210(a)(4) defines “institutional investor” as: (A) person described in Rule 4512(c), regardless of whether the person has an account with a member; (B) governmental entity or subdivision thereof; (C) employee benefit plan, or multiple employee benefit plans offered to employees of Investec’s account minimum size for investors is USD 50 million in assets (FINRA Rule 4512(c)’s definition of “institutional account”) to receive research / corporate access and more than USD 100 million, a Major US Institutional Investor, to trade foreign securities under SEC Rule 15a-6. FINRA proposes to amend FINRA Rule 4512, Customer Account Information, to carve out institutional accounts from the requirements of FINRA Rule 4512 (a) (1) (C). FINRA Rule 4512 (a) (1) (F) (Customer Account Information) requires member firms, for each of their non-institutional customer accounts, to make a reasonable effort to obtain the name and contact information for a trusted contact person (TCP) age 18 or older. 6. Jan 15, 2021 · FINRA Rule 4512(c) states the for purposes of the rule, the term “institutional account” means the account of: (1) A bank, savings and loan association, insurance company or registered investment company; (2) an investment adviser registered either with the SEC under Section 203 of the Investment Advisers Act or with a state securities Description of the Proposed Rule Change6. The Financial Industry Regulatory Authority, or FINRA, defines an institutional account in Rule 4512(c) as: Either a bank, savings and loan association, insurance company, or registered investment company, or We would like to show you a description here but the site won’t allow us. Suitability. Brokerage accounts allow investors to buy and sell numerous types of investments. Feb 29, 2024 · 5 FINRA Rule 4512(c)(3) defines an “institutional account” as a “person (whether a natural person, corporation, partnership, trust or otherwise) with total assets of at least $50 million. Improper Use of Customers' Securities or Funds; Prohibition Against Guarantees and Sharing in Accounts. SR-FINRA-2016-039) (Approval Order). TRANSACTIONS WITH CUSTOMERS. 7 Furthermore, a member would not be required to disclose enhanced compensation in an amount less than $50,000. The term "institutional account" is defined in Rule 4512 (c) to mean an account of "(1) a bank, savings and loan association, insurance company or registered investment company; (2) an investment adviser Incorrect Designation of Institutional Accounts – Failing to provide disclosures to certain customers because the firm identified those customers’ accounts as “institutional,” even though the customers did not meet the “institutional” definition in FINRA Rule 4512(c) (Customer Account Information) or MSRB Rule G-8(a)(xi). , offerings of funds that are exempt from registration pursuant to Section 3(c)(7) of the 1940 Act (a “3(c)(7) Fund”)). A trusted contact can help firms connect with investors to confirm current contact information Feb 5, 2018 · FINRA Rule 4512, which governs the information members must obtain and maintain in connection with each customer account, now requires members to make reasonable efforts to obtain for non-institutional customers the name of and contact information for a trusted contact person age 18 or older who may be contacted about the customer’s account Trusted Contact Person—Amendments to Rule 4512 The amendments to Rule 4512 require members to make reasonable efforts to obtain the name of and contact information4 for a trusted contact person5 upon the opening of a non-institutional customer’s account or when updating account information for a non-institutional account in existence prior Mar 12, 2024 · FINRA Rule 4512(c)(3) defines “institutional account” to mean the account of “any other person (whether a natural person, corporation, partnership, trust or otherwise) with total assets of Institutional investors that are not QIBs but meet the definition of “institutional account” as defined in FINRA Rule 4512(c) may not receive institutional debt research until completing the Affirmative Consent Certificate of Institutional Account to Receive Institutional Debt Research form and returning the form to the institutional client Mar 25, 2020 · First, the account must meet the definition of institutional account as defined in FINRA Rule 4512(c). FINRA believes that using the definition of an institutional account as set forth in Rule 4512(c) to define the scope of the proposal is appropriate Private placements sold solely to institutional accounts (as defined in Rule 4512(c)) are exempt from the filing requirements of the rule (see Rule 5123(b)(1)(A)). (a) Prior to executing a transaction for or with a customer on a "net" basis as defined in paragraph (e) below, a member must provide disclosure to and obtain consent from the customer as provided in this Rule. The term "institutional account" includes, among other persons, any natural person or entity not included within the other persons described in the The requirements of this Rule shall not apply to transactions in unit investment trusts, municipal fund securities as defined under MSRB Rule D-12, qualified tuition programs pursuant to Section 529 of the Internal Revenue Code and variable contracts or redeemable securities of companies registered under the Investment Company Act, as amended Institutional vs. 11 See FINRA Rule 2210(d)(1)(F)(iii). ‹ 4512. Rule 4512 likewise describes the circumstances under which member firms may contact a trusted contact and provides that such circumstances must be Rule 2111 is composed of three main obligations: reasonable-basis suitability, customer-specific suitability, and quantitative suitability. 06 to Rule 4512. 5 Rule 2210(a)(4) provides that “institutional investor” means any: (A) person described in Rule 4512(c), regardless of whether the person has an account with a member; Jan 4, 2013 · The proposed rule would exclude disclosure to customer accounts that meet the definition of an institutional account pursuant to FINRA Rule 4512(c), except any natural person or a natural person advised by a registered investment adviser. Which private placements sold to accredited investors must firms file under Rule 4. . 00 SEA Rule 17a-4 1. FINRA Rule 4512 defines an "institutional account" as (1) a bank, savings and loan association, insurance company or registered investment company; (2) an investment adviser registered either with the SEC under Section 203 of the Investment Advisers Act of 1940, as amended (the “Advisers Act”) or with a state securities commission QPs, as defined under the 1940 Act , with respect to offerings in which only QPs can invest (e. 00 NYSE Rule 440. See FINRA Rule 2210(a)(6). 2114. May 14, 2018. A high net-worth individual’s treatment as “institutional” excludes their account from, among other things, FINRA’s “customer-specific” suitability review requirements. Second, the broker-dealer must have a reasonable basis to believe that the institutional customer is capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies Mar 8, 2024 · FINRA Rule 4512(c)(3) defines “institutional account” to mean the account of “any other person (whether a natural person, corporation, partnership, trust or otherwise) with total assets of at least $50 million. ‹ 2110. Rule 4512(c) defines ‘‘institutional account’’ to mean the account of: (1) a bank, savings and loan association, insurance company or registered investment company; (2) an investment adviser registered either with the SEC under Section 203 of the Advisers Act or with a state securities investors (institutional debt research) from many of those structural protections, as well as prescriptive disclosure requirements. General Standards1000. FINRA Rule 4512 establishes criteria for defining an "institutional account" within the financial industry, specifically requiring that such accounts must belong to entities or individuals with total assets of at least $50 million. 3 Eligible institutional investors were required to affirmatively notify a member (a) Each member shall maintain the following information: (1) for each account: (A) customer's name and residence; (B) whether customer is of legal age; (C) name(s) of the associated person(s), if any, responsible for the account, and if multiple individuals are assigned responsibility for the account, a record indicating the scope of their responsibilities with respect to the account exempt from those rules’ requirements private offerings sold solely to QPs, as defined in Section 2(a)(51)(A) of the Investment Company Act. Jun 19, 2019 · FINRA Rule 4512(c)(3) defines the term “institutional account” to include natural persons with assets of at least $50 million. QIBs and Major Institutional Investors can Jan 1, 2018 · The trusted contact requirement does not apply to institutional accounts as defined in Rule 4512, but it does apply to the accounts of non-natural persons that do not meet the definition of Dec 19, 2022 · Under FINRA Rule 4512, member firms are required to make reasonable efforts to obtain the name and contact information of a trusted person when opening all non-institutional customer accounts. When opening a brokerage account, investors have two main options: a cash account or a margin account. 2. Rule 4512 requires member firms to make reasonable efforts to obtain the name of and contact information for a trusted contact person upon the opening of a non-institutional customer’s account or when updating account information for a non-institutional account in existence prior to the effective date of the amendments Dec 17, 2020 · So, there are other rules that define, instead, what an institutional investor is. Member Application and Associated Person Registration2000. g. 78 "Institutional account" means the account of a bank, savings and loan association, insurance company, registered investment company, registered Jul 15, 2021 · 4 Rule 4512(c) defines “institutional account” as the account of: (1) a bank, savings and loan association, insurance company or registered investment company; (2) an investment adviser registered either with the SEC under Section 203 of the Investment Advisers Act or with a state securities commission (or any agency or office performing 9 Rule 4512(c) defines “institutional account” to mean the account of: (1) a bank, savings and loan association, insurance company or registered investment company; (2) an investment adviser registered either with the SEC or with a state securities commission; or (3) any other person (whether a natural person, corporation, partnership, trust or is not practical in all cases, such as an institutional account, where multiple individuals cover the account. (a) Each member shall keep and preserve in each office of supervisory jurisdiction either a separate file of all written customer When used in these By-Laws, unless the context otherwise requires, the term: (a) "Act" means the Securities Exchange Act of 1934, as amended; (b) "bank" means (1) a banking institution organized under the laws of the United States, (2) a member bank of the Federal Reserve System, (3) any other banking institution, whether incorporated or not, doing business under the laws of any State or of proposal would allow a firm to send desk research to any account that meets the definition of an “institutional account” in Rule 4512(c) without negative consent for a period of up to 90 days after the effective dates of the proposed amendments. (b) With respect to non-institutional customers, the member must obtain the (Pursuant to FINRA Rule 2111)1 In connection with any recommended2 transaction or investment strategy by a registered broker-dealer, the undersigned acknowledges on behalf of the Institution named below that: I. 2. . 01 Definition. S. 1 The trusted contact is intended to be a resource for the member firm in a host of situations (e. Customer Account Statements and Confirmations. The term “non-institutional customer” is defined in Rule 2232(f)(4) to mean a customer with an account that is not an institutional account. With respect to a discretionary customer account maintained by a member, FINRA Rule 4512(a)(3) currently requires a member to Incorrect Designation of Institutional Accounts – Some firms failed to provide disclosures to certain customers because they identified those customers’ accounts as “institutional” even though they did not meet that definition in FINRA Rule 4512(c) (Customer Account Information) or MSRB Rule G-8(a)(xi). FINRA Rule 4512 (c) defines the term "institutional account" to mean the account of: (1) a bank; (2) a savings and loan association; (3) an insurance company; (4) a registered investment company; (5) an SEC-registered investment adviser or a state Dec 5, 2011 · December 5, 2011. “with”), the SEC does not Among others, FINRA Rule 4512 defines "institutional account" as any person with total assets of at least: $50 million. Duties and Conflicts3000. The positive news for investors is that additional help is available. Among others FInra rule 4512 defines institutional account as any person with total assets of at least: This problem has been solved! You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Quotation, Order, and Transaction Reporting Facilities7000. (a) General Except as otherwise provided by paragraph (b), each general securities member shall, with a frequency of not less than once every calendar quarter, send a statement of account ("account Mar 12, 2009 · A member may negotiate specific terms and conditions applicable to the acceptance of an order for customer accounts that meet the definition of an "institutional account" as that term is defined in Rule 4512 (currently NASD Rule 3110), or for orders of 10,000 shares or more, unless such orders are less than $100,000 in value. Financial and Operational Rules5000. FINRA Rule 4512, based in large part on existing requirements in NASD Rule 3110 (c), requires firms to maintain certain information relating to customer accounts - as institutional accounts, as defined in FINRA Rule 4512(c),4 qualified purchasers, as defined in the Investment Company Act of 1940,5 and qualified institutional buyers,6 as defined in Rule 144A under the Securities Act of 1933 (“Securities Act”). 2165. Brokerage Accounts. Among others, FINRA Rule 4512 defines an "institutional account" as any person with total assets of at least $50 million. the rule. Amended by SR-FINRA-2016-032 eff. 2230. FINRA Rule 4512 also describes the circumstances in which Apr 8, 2019 · Trusted Contact Person—Amendments to Rule 4512. The second is a provision in FINRA Rule 4512 that requires broker-dealers to ask customers for information about trusted contacts, essentially accounts that are not institutional accounts, is appropriate because retail customers typically have less ready access to market and pricing information than institutional customers. Dec 16, 2019 · While Regulation BI applies only to retail customers, Rule 2111 applies to all customers of a broker-dealer, albeit with an exemption available for institutional accounts, as defined in FINRA Rule Mar 31, 2018 · The goal of the changes to Rule 4512 is to add new layers of protection for older investors who may be more vulnerable to financial exploitation. 2232. The difference between them is how and when you pay for your investments. Securities and Exchange Commission (SEC) to permit e-signatures for Dec 15, 2022 · FINRA Rule 4512 (Customer Account Information) Rule 4512 requires member firms to make reasonable efforts to obtain the name of and contact information for a trusted contact person upon the opening of all non-institutional customer accounts. (Pursuant to FINRA Rule 2111)* In connection with any recommended transaction or investment strategy by a registered broker-dealer, the undersigned acknowledges on behalf of the Institution named below that: I. Rule 4512 also describes member firms’ obligations regarding non-institutional accounts opened prior to the amendment’s effective date. Customer Account Information. Control means beneficial interest, as defined in FINRA Expand All | Collapse All0100. FINRA Rule 4512(c) states that for purposes of Rule 4512 (Customer Account Information), the term “institutional account” means: a bank, savings and loan association, insurance company or registered investment Jan 8, 2018 · New FINRA Rule 2165 and amended FINRA Rule 4512 were approved by the U. g Dec 12, 2012 · 11 FINRA Rule 4512(c) defines an “institutional account” to mean the account of a bank, savings and loan association, insurance company, registered investment company, registered investment adviser, or any person, including natural person, with total assets of at least $50 million. 9 See FINRA Rule 2214(b). Sep 28, 2021 · FINRA Rule 4512 requires FINRA member firms to ask an investor for the name and contact information of a trusted contact person when opening a non-institutional customer’s account or when updating account information for a non-institutional account. Additionally, FINRA Rule 4511 requires firms to preserve for a period of at least six years those FINRA books and records for which there is no specified retention period under the FINRA rules or applicable SEA rules. 00 SEA Rule 17a-3. FINRA believes that allowing negative consent and the transition period would reduce Rules Reference Guide—2015 Advertising Regulation Conference FINRA Rules Rule 2210 Communications with the Public 1 Rule 2212 Use of Investment Companies Rankings in Retail Communications 13 Rule 2213 Requirements for the Use of Bond Mutual Fund Volatility Ratings 16 Rule 2214 Requirements for the Use of Investment Analysis Tools 18 in FINRA Rule 4512(c) (the definition of "institutional account" for purposes of the rules governing members' books and records), regardless of whether the person has an account with a member. FINRA Rule 4512 also describes the circumstances in which firms and their associated persons Jun 30, 2020 · 2111. person acting solely on behalf of any such institutional investor. Jan 5, 2023 · FINRA Rule 4512(a)(1)(F) requires FINRA members to make reasonable efforts to obtain the name of and contact information for a TCP for non-institutional customer accounts to address possible financial exploitation; to confirm the specifics of the customer's current contact information, health status, or the identity of any legal guardian Feb 15, 2017 · The term "non-institutional customer" is defined in Rule 2232 (f)(4) to mean a customer with an account that is not an institutional account. It is an Institutional Account as defined in FINRA Rule 4512(c)3**; II. 4513. Recommendations to Customers in OTC Equity Securities ›. The term “institutional account” is defined in Rule 4512(c) to mean an account of “(1) a bank, savings and loan association, insurance company or registered investment company; (2) an Mar 25, 2020 · 7 See FINRA Rule 2111(a). 7. (a) Each member shall maintain the following information: (1) for each account: (A) customer's name and residence; (B) whether customer is of legal age; (C) name(s) of the associated person(s), if any, responsible for the account, and if multiple individuals are assigned responsibility for the account, a record indicating the scope of their responsibilities with respect to the account Feb 28, 2024 · FINRA Rule 2210(a)(4). ” The rule also includes banks, savings and loans, insurance companies, registered investment companies, and registered investment advisers. The amendments to Rule 4512 require members to make reasonable efforts to obtain the name of and contact information for a trusted contact person upon the opening of a non-institutional customer’s account or when updating account information for a non-institutional account in existence prior Apr 30, 2020 · Overview of FINRA Senior Exploitation Rules The FINRA Senior Exploitation Rules provide firms with the tools to protect senior investors and help firms address risks relating to possible financial exploitation. Clearing, Transaction and Mar 17, 2022 · 2100. 4514. See FINRA Rule 5122(b)(2). Supervision and Responsibilities Relating to Associated Persons4000. (a) A member or an associated person must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the Mar 23, 2016 · former customer would not include a customer account that meets the definition of an institutional account pursuant to FINRA Rule 4512(c); provided, however, accounts held by a natural person would not quali fy for the institutional account exception. FINRA Rule 2111's "customer-specific" obligation requires that a member or associated person have a reasonable basis to believe that the recommendation is suitable for a particular customer based on: institutional investor. FINRA Rule 4512(c) states that for purposes of Rule 4512 (Customer Account Information), the term “institutional account” means: a bank, savings and loan association, insurance company or registered investment company; an investment adviser registered either with the SEC under Section 203 of the Investment Advisers Nov 6, 2020 · See FINRA Rule 5122(a)(3). 4510. 05. “with”), the SEC does not Dec 5, 2011 · Up. 00 Regulatory Notices 09-63 and 11-05. While the industry speculated that FINRA might revise the definition of “institutional account” in Rule 4512(c) to align with the definition of “retail customer Suitability remains the standard to satisfy a broker-dealers’ customer-specific obligation to institutional investors, pension funds, charitable foundations, and accounts defined by Rule 4512(c), Rule 2111(b), and other FINRA rules that contain suitability considerations, such as Rule 2330 (Members Responsibilities regarding Deferred Variable Trusted Contact Person—Amendments to Rule 4512 The amendments to Rule 4512 require members to make reasonable efforts to obtain the name of and contact information4 for a trusted contact person5 upon the opening of a non-institutional customer’s account or when updating account information for a non-institutional account in existence prior Nov 6, 2020 · Many member private offerings are exempt from the rule's requirements, including among others, offerings sold only to institutional accounts, as defined in FINRA Rule 4512(c), qualified purchasers, as defined in the Investment Company Act of 1940, and qualified institutional buyers, as defined in Rule 144A under the Securities Act of 1933 File No. FINRA proposed to amend paragraph (a)(3) of FINRA Rule 4512 (Customer. Institutional investors, per the “institutional account” definition under FINRA Rule 4512(c), and QPs can (B) The reference in FINRA Rule 5320 to an "institutional account", as defined in FINRA Rule 4512(c), shall be construed to apply to accounts of customers that do not meet the definition of "non-institutional customer", as defined in General 9, Section 10(c); . 6 This six-year retention period Oct 1, 2021 · Each member that sells a security in a non-public offering in reliance on an available exemption from registration under the Securities Act ("private placement") must: (i) submit to FINRA, or have submitted on its behalf by a designated member, a copy of any private placement memorandum, term sheet or other offering document, and any retail communication (as defined in Rule 2210) that promotes Mar 19, 2018 · A non-institutional customer is a customer with an account that is not an institutional account, as defined in Rule 4512. This term shall not include an account of a non-natural person that meets the definition of an institutional account pursuant to Rule 4512(c). See FINRA Rule 5122(a)(2). Recommendations. 2130. Unfortunately, unscrupulous brokers and advisors are unlikely to adhere to and utilize this new protection. 10 For a more detailed discussion of the differences between FINRA Rule 2214 and the proposal, see Comparison to Projections Permitted by FINRA Rule 2214, infra. For the purpose of this Rule, the term “former customer” shall mean any customer that had a securities account assigned to a registered person at the registered person’s previous firm. Books and Records Requirements. Securities Offering and Trading Standards and Practices6000. (C) name(s) of the associated person(s), if any, responsible for the account, and if multiple individuals are assigned responsibility for the account, a record indicating the scope of their responsibilities with respect to the account, provided, however, that this requirement shall not apply to an institutional account; Mar 8, 2024 · FINRA Rule 4512(c)(3) defines “institutional account” to mean the account of “any other person (whether a natural person, corporation, partnership, trust or otherwise) with total assets of at least $50 million. See Rule 4512(b) and Supplementary Material . As defined in FINRA Rule 4512(c), the term “institutional account” means the account of: (1) a bank, savings and loan association, insurance company or registered investment Jun 17, 2015 · 20 However, the FINRA and NYSE rules define the term "institutional account" differently. 2150. The proposal defined “institutional investor” as an “institutional account” in FINRA Rule 4512(c). retail investors: The official definition. The Rule Notices. Regulatory Notice 15-37: FINRA seeks comment on proposed adoption of FINRA Rule 2165 to permit qualified persons of firms to place temporary holds on disbursements of funds or securities from the accounts of specified customers where there is a reasonable belief of financial exploitation of these customers. Dec 4, 2020 · 2 Note that in addition to certain specified types of entities such as banks, registered investment advisers, and insurance companies, FINRA Rule 4512(c) defines the term "institutional account" to include any person (including an individual) with total assets of at least US$50 million. Rule 4512 requires firms to make reasonable efforts at account opening and when updating the account(s) of senior investors and vulnerable adults (specified adults) to: offerings sold only to institutional accounts, as defined in FINRA Rule 4512(c),4 2 A “control entity” means any entity that controls or is under common control with a member, or that is controlled by a member or its associated persons. 7 See proposed FINRA Rule 2273. Customer Account Statements. Up. Oct 5, 2020 · FINRA Rule 4512. Nov 24, 2023 · The definition of ``retail customer'' under Reg BI differs from the definition of ``retail investor'' under FINRA Rule 2210, which includes any person other than an institutional investor, regardless of whether the person has an account with a member. Rule 2111(b) replaces the previous rule's definition of "institutional customer" with the more common definition of "institutional account" in FINRA's "books and records" rule, Rule 4512(c). 5 Rule 4512(c) defines ‘‘institutional account’’ as the account of: (1) A bank, savings and loan association, Apr 14, 2020 · FINRA Rule 2111(b) provides for a more permissive suitability standard for a broker-dealer making a recommendation to an “institutional account,” as defined in Rule 4512(c). 01 (Definition). (a) Definitions (1) For purposes of this Rule, the term “Specified Adult” shall mean: (A) a natural person age 65 and older; or Regulatory Obligations. 4 Rule 5122 also requires the filing of any amendments to such documents within 10 days of being provided to any investor or prospective investor. Authorization Records for Negotiable Instruments Drawn From a Customer's Account ›. ” FINRA Rule 2210(a)(4). Amended by SR-FINRA-2019-008. ” Despite the differences in the text of the rules (in particular, “has or controls” vs. Jul 1, 2020 · For example, member firms are not required to file offerings made pursuant to Securities Act Rule 144A or Regulation S, or offerings sold solely to institutional accounts as defined in FINRA Rule 4512(c). As FINRA noted during the Rule 2232 rulemaking process, any intentional delay of a customer execution to avoid triggering the mark-up disclosure requirements may violate Rule 2232, Rule 5310 (Best Execution and May 3, 2022 · The first is FINRA Rule 2165, which allows a broker-dealer to place a temporary hold on a disbursement of funds or a transaction if there's a reasonable suspicion of financial exploitation of a senior. 9 Rule 4512(c) defines ‘‘institutional account’’ to mean the account of: (1) A bank, savings and loan association, insurance company or registered investment company; (2) an investment adviser registered either with the SEC or with a state securities commission; or (3) any other person May 14, 2018 · (4) "non-institutional customer" shall mean a customer with an account that is not an institutional account, as defined in Rule 4512(c). FINRA Rule 4512 (c) defines institutional account to mean the account of: (1) a bank, savings and loan association, insurance company, or registered investment company; (2) an investment adviser registered either with the SEC under Section 203 of the nvestment Advisers Act of 1940 or with a state securities commission (or any agency or office May 6, 2019 · To address the concerns of member firms, in November 2018, FINRA filed a proposed change to Rule 4512 (a) (3) with the U. (a) The reasonable-basis obligation requires a member or associated person to have a reasonable basis to believe, based on reasonable diligence, that the recommendation is suitable for at least someinvestors. See Rules 5122(c) and 5123(b). As a result of these exemptions, both rules apply predominately to retail private placements. 3It is an Institutional Account as defined in FINRA Rule 4512(c) ; II. (FINRA) includes natural persons with total assets of at least US$50 million, neither Reg BI nor Form CRS contains any monetary threshold above which natural persons would no longer be considered Institutional Account, as the term is defined under FINRA Rule 4512(c), of one of the following types: • A bank, savings and loan association, insurance company, or registered investment company; • An investment adviser registered either with the SEC under Section 203 of the Investment Advisers Act or with a Dec 17, 2019 · 3 FINRA Rule 4512(c) defines "institutional account" as: (1) a bank, savings and loan association, insurance company or registered investment company; (2) an investment adviser registered either with the SEC under Section 203 of the Investment Advisers Act of 1940 or with a state securities commission (or any agency or office performing like October 2015. Securities and Exchange Commission (SEC) in February 2017, and become effective on February 5, 2018. 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