broker-dealer-customer-agreement

Drafts SEC/FINRA-compliant Broker-Dealer Customer Agreements covering account opening, trading, margin, fees, risk disclosures, privacy, arbitration, and execution. Use when drafting or updating customer account agreements, brokerage agreements, or customer documentation for registered broker-dealers.

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Repositório: ThomasMoreAI/legal-skills-open
Última atividade na origem: 27 de maio de 2026 às 14:27
Idioma detectado do SKILL.md: inglês
Estrelas: 40
Forks: 4

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Broker-Dealer Customer Agreement

Drafts the master contractual agreement between a registered broker-dealer and its customers, covering all regulatory requirements under SEC, FINRA, Reg BI, and AML frameworks.

Prerequisites

Gather before drafting:

Firm registration — Form BD, FINRA CRD, state registrations, dual-registrant status
Business model — execution-only vs. full-service, order routing, PFOF, principal trading
Product catalog — all offered security types (equities, options, mutual funds, ETFs, penny stocks, alternatives)
Fee schedule — commissions, account fees, margin rates, revenue sharing
Existing docs — current applications, margin/options agreements, privacy policy, Form CRS
Regulatory history — exam findings, deficiency letters, enforcement actions

Quick Start

Confirm firm's business model and capacity (execution-only, recommendation-making, or dual registrant)
Identify all offered products and applicable special rules
Draft agreement sections per the structure below
Tailor provisions to firm's actual services — omit inapplicable sections
Verify all statutory/rule citations against current law
Ensure margin and arbitration warnings use prominent formatting (bold/caps, separate signature)
Cross-check consistency with Form CRS, Reg BI disclosure, fee schedule, and privacy policy

Agreement Sections

1. Party Identification & Account Establishment

BD identification: legal name, principal office, SEC reg number, FINRA CRD
Customer identification per CIP Rule (USA PATRIOT Act §326): name, address, DOB, SSN/TIN, citizenship
Entity customers: beneficial owners ≥25% or control persons
Account types: cash (Rule 15c3-3), margin (Reg T), retirement, joint (JTWROS/TIC)
KYC/suitability data per FINRA Rules 2090/2111
Firm reserved rights: reject applications, restrict activities, close accounts

2. Service Relationship & Obligations

Capacity disclosure: execution-only, recommendation-making (Reg BI), or dual registrant (BD vs. IA)
If recommendations made: Reg BI four obligations — Disclosure, Care, Conflict of Interest, Compliance
Product-specific rules: penny stock (Rules 15g-2–15g-9), options (Rule 2360 + ODD), mutual funds (share class/12b-1), leveraged ETFs (compounding risk), day trading ($25K minimum)

3. Trading Authorization & Order Handling

Order channels with authentication requirements (MFA, recording disclosure)
Best execution obligations: price, speed, execution likelihood, order size, total cost
Order routing disclosure per SEC Rule 606; PFOF conflict disclosure
Order type risks: market (no price protection), limit (no fill guarantee), stop (becomes market), GTC (monitor intent)
Discretionary authority per FINRA Rule 3260 if applicable

4. Fee & Compensation Disclosure

Commissions, markups/markdowns, account fees (exact amounts or fee schedule reference)
Margin interest: base rate, spread, calculation method, tiered rates
PFOF, revenue sharing, 12b-1 fees, underwriting concessions, proprietary product conflicts
Cross-reference Reg BI disclosure and Form CRS

5. Margin Lending

Regulatory framework: Reg T (50% initial), FINRA 4210 (25% maintenance), house requirements
Include concrete margin call example showing equity erosion and call trigger
Firm rights: charge interest, hypothecate securities per Rule 15c3-3, no lending of fully paid without consent
Liquidation rights (PROMINENT): firm may sell without notice/consent; sole discretion on securities/timing; not required to minimize loss
Bold risk warnings (require separate signature): losses can exceed investment; may owe more than deposited; firm can force sale; customer cannot choose securities sold

6. Risk Disclosures & Acknowledgments

Product-specific risks: market, liquidity, equity, options (unlimited on uncovered writes), fixed income, penny stock, leveraged ETFs, international
Required acknowledgments (signature/initial): understood agreement, received ODD/penny stock disclosure, total loss possible, sole responsibility in non-discretionary accounts

7. Corporate Actions & Account Maintenance

Dividends, mandatory/voluntary actions, proxy voting, securities lending
Confirmations (T+1) and statements (monthly/quarterly); must review for errors
Error reporting deadlines: confirmations 5 business days, statements 30 days

8. Privacy & Data Security

Draft per SEC Regulation S-P
Cover: information collected, uses, sharing categories (providers, regulators, affiliates, non-affiliates)
Opt-out procedures, security measures, breach notification per state laws

9. Amendment, Assignment & Termination

Amendments: 30 days' notice; continued use = acceptance; regulatory changes may take immediate effect
Assignment: customer needs consent; firm may assign in mergers/acquisitions
Termination: customer-initiated (settle trades, ACATS 5-7 days) and firm-initiated (violations, suspicious activity, death)
Records retained per SEC Rule 17a-4 (6 years post-close)

10. Mandatory Arbitration

Include FINRA-required all-caps disclosure (waiver of jury trial, limited discovery, binding awards)
Scope: all controversies, all legal theories
Forum: FINRA Dispute Resolution; >$100K three arbitrators (majority public); ≤$100K single arbitrator
Limited judicial review: vacatur only for fraud, partiality, or excess of powers
Preserved rights: customer may still file with SEC/FINRA/state regulators
Governing law and severability provision

11. Execution & Acknowledgments

Customer representations: legal capacity, accurate information, understands risk
Entity-specific: signatory authorization, governing document compliance, supporting docs
Signature requirements by account type (individual, joint, entity)
E-signature compliance per E-SIGN Act/UETA; click-to-agree accepted; right to withdraw e-delivery consent
Integration clause: agreement + incorporated documents = entire agreement
Non-waiver provision

Key Regulatory Citations

Citation	Subject
USA PATRIOT Act §326 / CIP Rule	Customer identification
FINRA Rules 2090/2111	KYC and suitability
Regulation Best Interest	Recommendation standard (four obligations)
SEC Rule 15c3-3	Customer protection / segregation
Reg T / FINRA Rule 4210	Margin requirements
SEC Rules 15g-2–15g-9	Penny stock requirements
FINRA Rule 2360	Options
SEC Rule 606	Order routing disclosure
FINRA Rule 3260	Discretionary authority
SEC Regulation S-P	Privacy
SEC Rule 17a-4	Records retention
E-SIGN Act / UETA	Electronic signatures
Federal Arbitration Act	Arbitration enforceability

Pitfalls

Omitting penny stock provisions — required if firm offers penny stocks (Rules 15g-2–15g-9); must not be skipped
Weak margin warnings — liquidation rights and risk warnings must be prominent (bold/caps) with separate signature/initial
Inconsistent documents — agreement must align with Form CRS, Reg BI disclosure, fee schedule, and privacy policy
Unverified citations — always verify statutory and rule citations against current law before finalizing
State law variations — enforceability varies by jurisdiction, especially arbitration; flag issues
Retail comprehensibility — agreement must be understandable by investors with limited financial sophistication
Including unused provisions — omit provisions for services the firm does not offer

For detailed per-section drafting specifications including field-level requirements, example language, and product-specific tables, see references/SECTION-SPECS.md.