Series 7

AAA

Customer Accounts - Closing Accounts

There are many other reasons to close accounts. Generally, these are up to the investor.

Account Holder is Deceased
Upon hearing of the death of an account holder, the broker-dealer's first responsibility is to cancel all open orders and to ensure that no further orders are placed. Then he or she should add the word "deceased" to the name on the account while awaiting confirmation in the form of a death certificate.

  • Estate Requirements - Because money lives forever, the broker-dealer will now have to deal with some estate issues.
    • First, there may be a court order or a notarized will specifying who has ownership or discretion over the account.

    • The account cannot be closed until tax issues - state of legal residence at time of death and official notification from that jurisdiction that all tax claims have been settled - are resolved.

Transferring Funds to Another Brokerage
When a client decides to close an account and move the funds to another brokerage, both the holding and the receiving institution must, according to NYSE Rule 412, "expedite and coordinate" the transfer, which must be complete within three business days. Oddly, the SEC's website suggests allowing two to three weeks for the process. Even then, transfers may be delayed if:

  • the wrong transfer form is used;
  • the transfer form has been incorrectly completed;
  • the transfer involves a request to liquidate some or all of the assets;
  • the transfer includes a margin account;
  • the transfer is from one type of account into a different type of account;
  • the account owner is changed; or
  • the transfer involves a retirement account.
Margin Accounts
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