Legality of Buying/Selling Securities

FINRA FINRA Series 63
1

Right off the bat, massive shoutout to the program as a whole . Loved the format and used it for the SIE, 7 & 63. It was during my time studying for the 63 that a question came up in my mind and I have not been able to find it anywhere else on the internet as it is a pretty specific question. I know that only registered persons are able to buy and sell securities, but would there be a circumstance where an unregistered person could do so legally? I know of a company that has many unregistered people buying and selling securities under the direction of a registered person. It’s been explained to me that this is legal as those people are simply following the direction of the registered person. Since the registered person is still responsible for the trade and marked as the one executing the trade on the trade confirmation, everything is hunky dory, I am told. Is this true? Maybe I’m overthinking this, but I would love for someone much more knowledgeable than me to drop an answer and a quick explanation or link to something where I could better understand this.

Thank you so much!

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Hi, good question. It depends on the specifics, but generally yes, clerical roles can avoid registration. Here’s a snippet from our S63 chapter on agent registration exclusions:

While it can be safely assumed most broker-dealer employees will be required to register as agents, clerical employees can generally avoid this process. There are many different words and roles used to describe a clerical-type job, including:

  • Secretary (secretarial)
  • Ministerial
  • Administrative assistant
  • Receptionist
  • Clerk

When a broker-dealer employee does not operate as an agent, they can avoid registration as one.

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So the clerical employee can enter trades as long as it is under the direction of registered employee?

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For specifics, you’ll need to verify with a compliance professional :wink:

But yes, if they’re just filling out the form under the direction of someone else, that would likely be considered clerical.

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