Passing your broker’s account verification process, what is required from you

Best Binary Options Brokers 2020:
  • Binarium

    Best Binary Options Broker 2020!
    Good Choice for Beginners!
    Free Trading Education, Free Demo Account!
    Get a Sign-Up Bonus Now!

  • Binomo

    2nd in our ranking!

Why Do Brokers Ask Investors for Personal Information?

When investors contact brokers, they are often surprised by the number of requests for personal information. The broker is just complying with the law. Certain required information must be obtained before a broker can make any trades on behalf of a client.


  • Brokers need personal information to comply with tax laws, anti-money laundering regulations, anti-terrorist financing requirements, record-keeping procedures, and determining suitable investments.
  • Broker-dealers in the U.S. need a Tax Identification Number (TIN) from their clients, which is usually a Social Security Number (SSN).
  • Non-U.S. citizens can usually use a valid passport number, an alien registration card number, or other government-issued ID numbers instead of an SSN.
  • Other frequently requested information includes name, address, and date of birth.

SSN Requirements for Trading Stocks

Broker-dealers in the U.S. are required to record a Tax Identification Number (TIN) for their clients, and this number is usually a Social Security Number (SSN). However, there are several other ways for non-U.S. citizens to supply a TIN. In many cases, a valid passport number, an alien registration card number, and other government-issued ID numbers (such as a driver’s license number) can be used.

Personal Information

Brokers don’t ask investors for their personal information to make conversation. There’s a perfectly good reason behind it—they have to ask.

Tax compliance is one reason that brokers need personal information. Investors need to report capital gains, losses, and dividends to the IRS. It follows that brokers must have this data in order to send the required forms each year.

According to the Securities and Exchange Commission (SEC), there are three other reasons why brokers are required to ask for personal information. They are suitability, record-keeping requirements, and anti-terrorist / anti-money laundering (AML) laws.


Suitability refers to how an investor’s financial situation matches the advice and recommendations that are given by a broker. A broker must attempt to understand an investor’s circumstances and preferences. The broker should then provide recommendations that are suitable for that person and their investment objectives. A broker who does not do that violates rules laid out by the National Association of Securities Dealers.

Relevant information includes an individual’s risk tolerance, financial goals, the amount of debt an investor owes, the number of years to retirement, and net worth. A good broker will tailor advice to particular situations. If a broker advises you to take any action in direct contradiction of your financial goals and circumstances, you might even have grounds for legal action.

Record Keeping

Rules set out by the SEC require brokers to maintain a current record of personal information. The essential information the broker must seek includes the client name, Tax Identification Number (TIN), net worth, and account investment objectives. If the client refuses to provide this data, the broker is excused from following the rule. However, the broker must be able to prove that an effort was made to obtain and document the information.

Keep in mind that some of this information may change. It is the investor’s responsibility to volunteer information to update the record. Still, a broker may ask for updates on an annual basis. Address changes may be of particular importance because the investor will receive a prospectus and other information for each investment.

Terrorism and Money Laundering

Finally, the broker must provide client information to meet anti-money-laundering and anti-terrorist financing requirements. The minimum requirements for this section include:

Best Binary Options Brokers 2020:
  • Binarium

    Best Binary Options Broker 2020!
    Good Choice for Beginners!
    Free Trading Education, Free Demo Account!
    Get a Sign-Up Bonus Now!

  • Binomo

    2nd in our ranking!

  • Name
  • Address (home or business address, not a P.O. Box)
  • Tax Identification Number (TIN), such as a Social Security Number (SSN)
  • Date of birth (for a person)

This information allows the broker to verify the client’s identity. The client’s personal data is cross-checked against lists of known or suspected terrorists.

These requirements can create issues for misidentified individuals and victims of identity theft. An identity check in such a case may reveal that an identity has been stolen and is being abused for money laundering purposes. Before visiting a broker, it is a good idea to review credit reports for signs of unusual activity. There are also services that monitor Social Security Numbers to spot potential theft.

Additional Information

The Financial Industry Regulatory Authority (FINRA) has a list of other personal information a broker may ask when opening an account. While not required, it suggests that investors pass these details on so the firm can better serve their trading and investment needs:

  • Contact person: They may ask for the name, address, and telephone number of a trusted contact person. FINRA states that this is not a requirement. This information is only needed if the broker is authorized to disclose information in the event of financial exploitation.
  • Type of account: The broker may ask investors if they want to open cash accounts or margin accounts. In a cash account, investors are required to pay for their trades with cash deposits. Margin accounts are needed for using most types of leverage and trading derivatives.
  • Uninvested cash: Investors may also be asked how they intend to deal with cash on hand in their accounts. That includes any money they deposit at regular intervals, dividends, or interest on investments. Automatic reinvestment plans usually boost returns in the long run.

Online Brokerages and Trading Platforms

Some brokerages have traditional offices, which means that investors are able to supply confidential information in person. Transferring data in person can reduce the risk of identity theft.

When trading online, investors are often required to give up personal information through the trading platform or app.

However, due diligence remains crucial online. Just as with any traditional broker, investors need to know who is getting their information. Read up on the brokerage’s background and check out reviews to see if it is legitimate. Beware of fake apps and online platforms designed to harvest personal information. Legitimate apps will usually have a large number of users and reviews.

Requirements to Apply for a Real Estate Broker License

To obtain a real estate broker license, you must first qualify for and pass a written examination. Those who pass the examination are provided a license application which must be submitted to and approved by the DRE.

General Requirements

  • Age: You must be 18 years of age or older to be issued a license.
  • Residence: If you are not a California resident, see Out-of-State Applicants.
  • Honesty: Applicants must be honest and truthful. Conviction of a crime may result in the denial of a license. Failure to disclose any criminal violation or disciplinary action in an applicant’s entire history may also result in the denial of a license. For further information, see Avoid Potential Denial of Your License Application (RE 229) and Application Eligibility Information (RE 222) .
  • Experience: A minimum of two years full-time licensed salesperson experience within the last five years or the equivalent is required. For further information, see Documenting Experience Requirements for the Broker Examination.

Course Requirements

Applicants for a real estate broker license examination must have successfully completed the following eight statutorily required college-level courses:

  1. Real Estate Practice; and
  2. Legal Aspects of Real Estate; and
  3. Real Estate Finance; and
  4. Real Estate Appraisal; and
  5. Real Estate Economics or Accounting*; and
  6. Three courses from the following list:
  • Real Estate Principles
  • Business Law
  • Property Management
  • Escrow
  • Real Estate Office Administration
  • Mortgage Loan Brokering and Lending
  • Advanced Legal Aspects of Real Estate
  • Advanced Real Estate Finance
  • Advanced Real Estate Appraisal
  • Computer Applications in Real Estate
  • Common Interest Developments

*Note: If both Real Estate Economics and Accounting are taken, only two courses from the above group are required.

Once You Pass the Examination

After you pass the examination, and if you have not filed a License Combo Application:

  1. You will be sent a Salesperson License Application (RE 202) or Broker License Application (RE 200). This form must be completed and returned along with the appropriate fee within one year after passing the examination.
  2. A completed Live Scan Service Request (RE 237) must be submitted with the application. A license cannot be issued until DRE receives fingerprint response information. See Fingerprint Requirements for further information.
  3. (SALESPERSONS ONLY) Evidence of completion of Real Estate Principles, Real Estate Practice, and one additional course from the course requirements list must be on file before your license is issued.
  4. Out-of-state applicants must also submit a completed and notarized irrevocable Consent to Service of Process (RE 234) . See Out-of-State Applicants for further information.
Best Binary Options Brokers 2020:
  • Binarium

    Best Binary Options Broker 2020!
    Good Choice for Beginners!
    Free Trading Education, Free Demo Account!
    Get a Sign-Up Bonus Now!

  • Binomo

    2nd in our ranking!

Like this post? Please share to your friends:
How To Start Binary Options Trading 2020
Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: