Registered Principal

Posted in Finance, Accounting and Economics Terms, Total Reads: 171
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Definition: Registered Principal

Registered Principal is a person in an investment banking or securities firm who is licensed to oversee compliance, trading and sales operations. To become a registered principal one must pass Financial Industry Regulatory Authority series 24 test apart from basic securities licenses. For Registered Options Principals, one must clear FINRA series 4 test.

 

Registered principals oversee the accuracy of their companies' regular filings to federal agencies, pay processing fees, maintain minimum net capital, and ensure that employees are properly licensed as well.


The process may seem simple and easy, but considering the influence investment advisors have over clients' financial affairs and the dreams associated with those financial affairs it's a good idea to have a formal process of licensing registered principals so that they can understand what they are doing and think the implications of their decisions.

 

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