Options Account Approval: Registered Options Principal (ROP) Mandate
Before a customer can execute ANY options transactions, who MUST approve the options account in writing?
FINRA Rule 2360 mandates that every options account must be approved in writing by a qualified Registered Options Principal (ROP) BEFORE any option orders can be executed.
Complete Analysis & Legal Rationale
The customer must also receive the OCC Options Disclosure Document (ODD) at or prior to account approval.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Written approval by a qualified Registered Options Principal (ROP) is mandatory before trading.
Representatives cannot approve their own accounts.
The OCC clears and guarantees contracts; it does not approve retail customer accounts.
Executive officers do not review individual retail account forms.