Q: My compliance department is asking me for a 3210 letter. I don’t have any outside brokerage accounts, though. All I have is a 529 plan for my children, but I thought those are not included in rule 3210. Am I missing something?

A: No, you’re not missing anything. FINRA Rule 3210 says that associated persons are not permitted to open brokerage accounts at another member firm or financial institution without the prior written consent of the member firm they work for.

FINRA Rule 3210 says that associated persons must receive consent from their firms to open brokerage accounts at an outside firm.
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This includes accounts that the rep would have a beneficial interest in and also requires you to notify your employer about accounts that were opened before you became employed at your current firm.

“If the account was opened or otherwise established prior to the person’s association with the employer member, the associated person, within 30 calendar days of becoming so associated, shall obtain the written consent of the employer member to maintain the account and shall notify in writing the executing member or other financial institution of his or her association with the employer member,” according to the supplementary material associated with this rule.

The additional guidance says that the types of accounts that you’re presumed to have a beneficial ownership in include those of your children. However, that same supplementary material also goes on to say that “qualified tuition programs pursuant to Section 529 of the Internal Revenue Code” are not subject to the rule. So it would seem to me that you are clearly not required by the FINRA Rule to obtain a 3210 letter for this account.

However, I would suggest that you double check your compliance manual as I suppose it might be possible that, regardless of the FINRA Rule, your firm may require that you obtain a 3210 letter — or perhaps at least notify them — of any 529 plans that you have.

Alan J. Foxman

Alan J. Foxman

Alan J. Foxman is a senior consultant and vice president at NCS Regulatory Compliance, and a partner at the law firm of Dew Foxman & Haugh in Delray Beach, Florida.