FINRA Rule 4512(c) · Broker-dealers

FINRA Rule 4512(c): what counts as an institutional account

FINRA Rule 4512 sets the information a member firm must keep for each customer account. Paragraph (c) defines an "institutional account" — an account of a bank, savings and loan, insurance company, registered investment company, an investment adviser registered with the SEC or a state, or any other person with total assets of at least $50 million. Institutional accounts are exempt from some of the rule's requirements, such as asking for a trusted contact person.

The rules at a glance

Institutional account — (c)(1): Bank, savings and loan, insurance company, or registered investment company
Institutional account — (c)(2): Investment adviser registered with the SEC or a state
Institutional account — (c)(3): Any other person (individual, firm, trust) with total assets of at least $50 million
Trusted contact (a)(1)(F): Reasonable efforts to get one for non-institutional accounts

Who this applies to

FINRA member broker-dealers opening new accounts
Firms that serve banks, insurers, funds, and RIAs
Compliance staff writing account-opening procedures
Firms updating trusted contact person processes

Why it matters

• Labeling an account institutional without support for the $50M test
• Skipping the trusted contact request on accounts that do not qualify
• Account records that are missing or not kept up to date

How to get current

1List the account types your firm treats as institutional
2Document how you confirm the $50 million total-assets test
3Make sure non-institutional accounts get a trusted contact request
4Test a sample of new accounts each quarter
5Update your WSPs and account forms

Have us handle it

FINRA account-opening review

Included in Silver and above, or scoped quote

We review account forms, institutional classifications, and trusted contact steps, then update your WSPs. Standalone engagements are subject to the $2,500 annual minimum.

$2,500 minimum engagement. Smaller items are available to existing clients as add-ons or combined in the $2,500 Missed Deadline Rescue Bundle. Government and issuer fees pass through at cost.

Common questions

What is an institutional account under FINRA Rule 4512(c)?

An account of a bank, savings and loan, insurance company, registered investment company, an SEC- or state-registered investment adviser, or any other person with total assets of at least $50 million.

Do institutional accounts need a trusted contact person?

No. The trusted contact request in Rule 4512(a)(1)(F) applies to non-institutional customer accounts.

Is Rule 4512(c) the same as the institutional investor definition in Rule 2210?

No. They are similar but not the same. Check the definition in each rule before you rely on it.

Official sources: FINRA Rule 4512

Public-record status does not confirm a violation. Confirm deadlines and requirements with the regulator before filing. This guide is general information, not legal advice.