Joint accounts - check

FINRA
1

Hello, the textbook says :slight_smile:
“Even if there are 15 joint owners listed, any one owner can submit trading instructions, receive all the mail, manage the account, and request withdrawals without the permission of the other owners. However, all account owners’ names must appear on any issued check, regardless of who requested the check.”

When it says that the names of all account holders must appear on a check. does it mean that:

  • option 1: litterally the names must be on the checkbook but the check may be written to one specific person (which would be consistent with being able to request withdrawals)
  • or option 2: that the check must be written to all of them

I thought option 1 made more sense
But in the practice exam an answer seems to guide towards option 2…

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2

Hi @Esther_Cummings - good question! If a check is cut from the account, it must be made payable to all joint account owners. For example, let’s assume a two-person joint account owned by John and Jane Smith. Let’s say Jane calls the broker-dealer holding the account and asks for a $10,000 withdrawal to be taken in the form of a check. When the broker-dealer cuts the check, it must be made payable to both John and Jane Smith. A check made payable to only John or only Jane would be prohibited.

Also, all joint account owners would have their names listed on a checkbook as well. However, I wouldn’t expect to see the checkbook concept tested.

So - both option 1 and 2.

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