1.1 Retail Registrations and Trading Authority

Series 99 Exam at a Glance

This independent OpenExamPrep guide helps learners study the Operations Professional qualification. FINRA’s current outline allocates 35 scored items (70%) to operations and 15 (30%) to conduct. The exam delivers 50 scored plus five unidentified pretest items in 90 minutes, with no guessing penalty. The fee is $100, and FINRA uses an equated scoring system. The current official page and linked outline reviewed do not state a numerical passing cutoff. SIE and firm sponsorship/registration requirements apply. A percentage-to-raw-count calculation is not a guarantee of a passing result.

Use Series 99 practice questions to check application, and review the SIE guide for general securities foundations. Logistics and sources were checked October 20, 2026.

In broker-dealer back-office operations, establishing and maintaining customer account records is one of the most critical operational responsibilities. The operations professional acts as the ultimate gatekeeper, ensuring that account registrations accurately reflect legal ownership, that proper authorizing documentation is collected and verified, and that trading authorities adhere strictly to federal securities regulations, state property laws, and FINRA conduct rules. A failure at the onboarding stage—such as permitting an unauthorized individual to execute transactions or misclassifying ownership rights—exposes the firm to severe legal liability, customer disputes, and regulatory sanctions.

Individual Accounts and Trading Authorizations

An individual account is opened in the name of a single natural person. Only that named individual has the legal right to transact business, enter buy or sell orders, request checks, or transfer funds, unless a formal third-party trading authorization has been executed, documented, and approved by a registered principal.

Third-Party Trading Authorizations

When an account owner wishes to grant another party trading or disbursement authority, the broker-dealer requires specific legal documentation:

• Limited Power of Attorney (Limited POA): Grants the designated third party (the attorney-in-fact) the legal authority to enter buy and sell orders. It does not authorize the attorney-in-fact to withdraw money or securities, transfer assets out of the account, or change account registration details.
• Full Power of Attorney (Full POA): Grants comprehensive authority, potentially permitting trades and distributions within the document’s express powers. Self-dealing or gifts must never be inferred from the label. Operations departments scrutinize full POAs to protect against fraudulent transfers.
• Discretionary Authority (FINRA Rule 3260): If a registered representative is granted trading discretion, the customer must submit prior written authorization, and an appropriately qualified principal must approve the account in writing prior to any discretionary execution. Each discretionary order must be promptly reviewed by a principal.

Transfer on Death (TOD) / Payable on Death (POD)

An individual account owner may attach a Transfer on Death (TOD) designation to avoid probate. Under a TOD registration:

• The owner maintains complete, unilateral control over the assets during their lifetime.
• The designated beneficiaries hold no present ownership rights and cannot view account activity or enter orders while the owner lives.
• Upon the owner's death, ownership of the securities bypasses probate court and transfers directly to the designated beneficiaries upon submission of a certified death certificate and proof of beneficiary identity.
• While TOD avoids probate administration delays and court costs, it does not avoid federal or state estate taxes.

Joint Account Registrations

Joint accounts are established by two or more adult owners. While any individual joint owner may place trade orders without consulting the other owners, operational safeguards govern asset movement: the account agreement, law and verified authority determine who can direct distributions. Confirm authority before a title change or payment to one owner or a third party.

Joint Tenants with Right of Survivorship (JTWROS)

In a JTWROS registration, each joint owner holds an equal, undivided interest in the entire account (for example, two tenants have 50/50 undivided interests; three tenants have one-third each).

• Right of Survivorship: If one joint tenant dies, their interest automatically passes to the surviving tenant(s) by operation of law.
• The assets bypass probate, meaning the deceased tenant's estate or will cannot redirect the assets to other heirs.
• Operational Requirements Upon Death: The operations department must receive a certified copy of the death certificate, an affidavit of domicile, and inheritance tax waivers (where mandated by state law). The account is retitled in the name(s) of the surviving tenant(s).

Tenants in Common (TIC)

In a TIC registration, owners hold fractional, divisible ownership interests that can be unequal (for example, Owner A holds 70% and Owner B holds 30%).

• No Right of Survivorship: Upon the death of a tenant, that deceased tenant's fractional share does not pass to the surviving owner. Instead, it passes to the deceased tenant's estate or designated heirs via probate court.
• Operational Freeze: When the operations department receives notice of a tenant's death, all trading and asset disbursements are immediately frozen on the deceased tenant's portion of the account until legal estate documentation (Letters Testamentary or Letters of Administration) is provided by the probate court.

Tenancy by the Entirety

Available only to legally married couples in select jurisdictions, Tenancy by the Entirety treats the married couple as a single, indivisible legal entity. Neither spouse can alienate, transfer, or encumber the assets without the express consent of the other, and the account provides robust protection against the claims of individual creditors of one spouse. Like JTWROS, it features an automatic right of survivorship upon the death of either spouse.

Sources checked 2026-10-20: FINRA Series 99 outline, FINRA customer accounts, FinCEN CDD FAQs.