If my recollection is correct...it is an OSFI (or maybe federal) imposed requirement that for those working in a capital markets / IB type firm that their own trading accounts be operated under the same umbrella as the employing firm - from a regulator risk management perspective.

If my memory is foggy and it is not imposed directly by the regulators, then it is a good risk management strategy for the firm to use, for when the regulators come knocking and ask the firm to illustrate how they are managing regulatory, economic, capital, market risk.

That requirement seems to have been pretty standard practice through my rotation through the big 5 over the last few years.

They can fire him for lying. If it is a legitimate condition to impose on employment I don't know but they will likely get him to sign something to the effect that he is not trading elsewhere and so by violating that he can be fired. He could refuse to sign but then they will just hire someone else.

Without knowing more about the job and what he'll be doing I have no idea if the employer has a justified concern here but if I was asked to bet I'd say no. Basically for OP's situation to make sense he would have to have access to a considerable amount of confidential information yet the salary would have to be fairly low for him to care about the transaction cost difference and even consider risking the opportunity to save on commissions. OP never stated what he was going to be doing and what kind of information he'd have access to.

A second point is that while having the account at his employer would be the simplest way for the employer to monitor the trading it is certainly not the only way. OP could instead give the employer access to his records and agree to be audited. There might be a small fee from his current brokerage but it is certainly possible.

The final point is that auditing a individual employee is rather pointless. You'd have to be rather retarded to do insider trading though your own account if you worked in the financial industry and had access to confidential information. That is what friends are for. It seems like a lot of hassle for a counter measure that is completely ineffective.

I have a feeling though that OP has been hired by a mill. The fact that he has to come to a online site to ask and the tone of his post strongly implies he doesn't have a background in finance which brings us back to what kind of information would someone with no credentials have access to that justifies this? I think they just want to have his business and that the monitoring is an excuse.

The question is... could they fire him for not investing with their firm? That's what I was wondering.

There are two possibilities for why the employer would want this:

The first is that he will have access to sensitive information and the employer needs to be able to monitor his trading to fulfill a fiduciary duty to the firm's clients and confirm that OP is not using confidential information he gains though his employer to his own advantage. The second option is that he got a job at an investment mill and this is just a way to lock in one additional client.

To confirm bachi2005.... Your new employer wants you to put all your assets into their firm?! Why would they want that? You should be able to shop the market and put your assets anywhere you want ... IMO

At a minimum it is grounds for automatic dismissal should they discover that you lied.

Depending on what it is that you actually do and what kind of accreditation you possess it could also lead to some fairly serious professional sanctions.

As far as I know there is no easy way for your employer to find out about your account but is it really worth the risk? The difference between various brokerages is not that much (assuming we are talking about the same class of brokerage) so I don't believe hiding this account is a good play.

I can't comment on whether you need to disclose these accounts to your employer, but the question I'll raise is: If these are not registered accounts, and, they are not margin accounts, then how would your employer become aware of your investments outside of the firm - would they show up via a P.P.S.A search?

Personal Property Security Act:

http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_90p10_e.htm

Also, is your employer mandating that they handle the filing of your income taxes? If so, then that's a sure way for them to uncover this information.

Hi,

I recently joined a financial services company as an employee. Its in their policy to disclose my brokerage account information to them so as to prevent inside trading. I do not have any intention of doing inside trading. The problem is that they want me to transfer all my brokerage accounts to their approved brokerage companies which charge a very high trade commission comparing to my current brokerage company. I do plenty of active trading. Please suggest If I need to disclose my brokerage account information? If I don't disclose is there a way for my current financial services company to know that i have a brokerage account with another company. Please suggest.

Thanks in advance.

b