Compliance Registered Options Principal - CROP


DEFINITION of 'Compliance Registered Options Principal - CROP'

A supervisory and compliance position that FINRA required of options trading firms until June 2008. The CROP had to be one of the firm's officers or general partners and was responsible for ensuring the firm's regulatory compliance for its options trading activities for clients' accounts. The CROP was also responsible for ensuring regulatory compliance in the firm's interactions with the public, such as advertising. The CROP could also act as the Senior Registered Options Principal, another position formerly required by FINRA. CROPs must pass the Series 4 exam in the United States and the Options Supervisors Course in Canada.

BREAKING DOWN 'Compliance Registered Options Principal - CROP'

Under the changes, FINRA decided that firms could eliminate the position of CROP as long as they continued to fulfill their supervisory and compliance requirements. Multiple individuals became allowed to manage the responsibilities formerly required of CROPs. The changes did not eliminate the requirement that firms appoint a Registered Options and Security Futures Principal (ROSFP) to oversee the firm's public activities, such as the content of advertisements, educational materials and sales literature. The changes also made the ROSFP responsible for ensuring that customers could handle the risks of options trading and understand the transactions proposed for their discretionary accounts.

  1. Senior Registered Options Principal ...

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  2. Registered Principal

    A licensed securities dealer who is also empowered to oversee ...
  3. Head Trader

    The manager of a trading business. He or she is responsible for ...
  4. Option

    A financial derivative that represents a contract sold by one ...
  5. Registered Options Principal - ...

    An employee at a brokerage firm that is responsible for supervising ...
  6. Series 4

    A securities license entitling the holder to supervise options ...
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