What is a member company?
, also known as a clearing member, is a member company brokerage that has at least one officer holding a large stock exchange such as the New York Stock Exchange. This status is also awarded to any mediation or seller in which one of the officers is a member of a billing house or other kind of business that does business on the stock exchange and is classified as a self -regulatory. Usually, a member company has wider trade powers on the stock floor than other agents, which makes it easier to carry out orders on behalf of clients.
In the structure of a member company, some individuals may also be considered allied members. This designation is extended to officers of the company who do not have direct membership in the large stock exchange, but have a connection through the courtesy of another officer holding membership on the stock exchange. Allied members also have a number of advantages associated with this designation, including control of certain types of transactions on behalfENT and companies. The exact scope of the permit provided to the Allied member depends on the instructions and regulations established by the stock exchange in question.
become a member company requires a significant level of obligation to stock exchange. Usually it is necessary to buy what is called the seat on the stock exchange floor. Purchase costs will vary from one exchange to another, which generally requires an amount that exceeds $ 1 million USD. For larger companies, these costs are usually compensated by the ability to carry out real -time stores, which in turn increases commissions and fees charged to clients.
Officer of a member company that holds this place on the stock exchange often uses privileges to make orders for clients, but also has the ability to preliminarynce as a means of placing orders for its individual investment account. Most exchanges put certain limits trading with a personal account, which in turn helps minImplement the potential of dedicated persons. As long as the trades are carried out in accordance with current government trade and stock exchange standards, an official of a member firm can execute orders for both clients and their own personal investment portfolio.