A financial advisor is opening a corporate brokerage account for a newly formed technology firm structured as a C-corporation. The firm's chief executive officer (CEO) submits the account application and requests immediate trading authority and fund disbursement privileges, arguing that executive status automatically grants full control over corporate assets. Which of the following documents must the broker-dealer obtain to officially establish trading authority and identify the individuals authorized to act on behalf of the corporate account?
- A corporate resolution enacted by the board of directors specifying the authorized officers and their permitted activitiesCevap
- BA full power of attorney executed by the CEO delegating management authority to the broker-dealer
- CA discretionary account agreement signed by all corporate officers and ratified by state regulators
- DA joint tenancy agreement establishing rights of survivorship among the founding corporate executive team
Cevap
A corporate resolution enacted by the board of directors specifying the authorized officers and their permitted activities
When opening a corporate brokerage account, a broker-dealer must obtain a corporate charter (to verify the entity's legal existence) and a corporate resolution passed by the board of directors. The corporate resolution explicitly names the officers authorized to enter orders, request disbursements, and manage the account on behalf of the corporation.
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Anahtar Kavram
Corporate Account Documentation and Board Resolution Requirements