Identify the supervisory review, approval, and documentation required to open and maintain accounts, and the circumstances for restricting or closing an account.

Under FINRA Rule 4512, which signature requirement applies when a firm opens an ordinary cash account for a retail customer?

• AThe account record must carry the signature of the associated person who introduced the account and the signature or approval of a principal, but the customer's own signature is not required to open a cash account.check_circle Correct
• BThe customer must personally sign the new account form before any transaction is entered, and no principal approval is needed until the first trade settles.
• COnly a principal signature is required, and the identity of the associated person handling the account need not appear on the record.
• DNo signatures of any kind are required because the account record is purely informational and carries no supervisory function.

Why A is correct: Rule 4512 requires the record to identify and be signed by the associated person responsible for the account and to show principal approval, while a customer signature is not a condition of opening a cash account.

Why B is wrong: This overstates the customer's role and understates the principal's; a customer signature is not required to open a cash account, and principal approval is required, not deferred to settlement.

Why C is wrong: Principal approval is indeed required, but the rule also requires the account record to identify the associated person, so omitting that person is a compliance gap.

Why D is wrong: This ignores the supervisory purpose of the record; the associated person's signature and principal approval are both required under the rule.