Accepting Unsolicited Orders Requires Series 7 and 63
A large broker-dealer executed a Consent Order with the State of Connecticut acknowledging that designated Client Associates should have been licensed in Connecticut because they accepted and entered unsolicited orders. Generally, the Client Associates provided administrative support to client-facing Financial Advisors including responding to client requests and processing operational documents. The Consent Order alleges that the placing of unsolicited orders into the firm’s trading system required the CAs to register. The Consent Order alleges that the BD’s policy only allowed/required registration in the CA’s home state and one other state. The BD agreed to pay a fine of $359,100 fine as part of a broader $26 Million multi-state settlement.
OUR TAKE: Clients often ask when administrative, operational, and client support activity crosses the line into securities activities requiring licensing. In this case, Connecticut makes clear that accepting unsolicited client orders requires the Series 7 and 63.