|
When opening a new account, the brokerage firm may ask you to sign a legally binding contract to arbitrate any future dispute between you and the firm or your sales representative. This may be part of another document, such as a margin agreement. The federal securities laws do not require that you sign such an agreement. You may choose later to arbitrate a dispute for damages even if you do not sign the agreement. Signing such an agreement means that you give up the right to sue your sales representative and firm in court.
You may have your securities registered either in your name or in the name of your brokerage firm. Ask your sales representative about the relative advantages and disadvantages of each arrangement. If you plan to trade securities regularly, you may prefer to have the securities registered in the name of your brokerage firm to facilitate clearance, settlement, and dividend payment.
The Investment Decision
Never invest in a product that you don't fully understand. Consult information sources such as business and financial publications. Information regarding the fundamentals of investing and basic financial terminology can be found at your local library.
Ask your sales representative for the prospectus, offering circular, or most recent annual report – and the "Options Disclosure Document" if you are investing in options. Read them. If you have questions, talk with your sales representative before investing.
You also may want to check with another brokerage firm, an accountant, or a trusted business adviser to get a second opinion about a particular investment you are considering.
Keep good records of all information you receive, copies of forms you sign, and conversations you have with your sales representative.
|