Options Clearing Corporation (OCC) performs the following functions
- Standardize option contracts
- Issue options
- Guaranteeing performance of the contracts
Discretionary accounts are always a point of concern for regulators especially if
the registered representative has discretion over a customer account
Any member firm that promotes pattern day trading and is actively seeking day traders for retail accounts must
must post the disclosure statement on the member’s website clearly and conspicuously. This is one of the responsibilities of a ROP.
A broker-dealer opening a new options account for a customer must receive the customer’s completed options agreement no later than
15 calendar days after the account is approved for options trading.
Account statements for an option customer must be maintained at both the branch office and the principal supervisory office for the most recent
six-month period.
All of the following actions must be completed prior to a customer entering his first option trade
- completion of the new account form
- delivery of an OCC disclosure booklet
- approval by a sales supervisor
Before the Special Statement for Uncovered Options Writers can be delivered to approved options customers, the document must
have received prior written approval from FINRA.
If a customer wishes to open more than one account with a member firm, the firm should obtain a statement attesting that
no one else has any interest in the second and subsequent accounts and that each account unreservedly guarantees the others.
Under FINRA rules, copies of completed options worksheets must be retained for
3 years
