Think about the New York Stock Exchange - you know, that place where people buy and sell stocks - as a club. There are full members and there are not-quite full members. An allied member is in the not-quite category.
While not personally a member of the NYSE, an allied member is affiliated with a company that is a full member. He or she must work as an officer of a member company (meaning a high-ranking bigwig there) or have a sufficient stock holding in the firm. He or she must also pass an exam. Once approved, the allied member can conduct business on the NYSE and go onto the trading floor, where the real fun happens.
Related or Semi-related Video
Finance: What is an Associated Person?3 Views
Finance a la shmoop... what is an associated person oh it sounds so
devious maybe even evil associated person a crime scene like were they [Man with horns on his head in a street]
there when the murder happened or were they just hanging out at seedy billiards
club shoes optional....Picture a bright light
shining in your face and a dark voice asking are you now or have you ever been
associated with an associated person yeah not so much [Light shining on a man]
all right an associated person is just a principal in a FINRA covered firm... FINRA,
FINRA it stands for Financial Industry Regulatory Authority and the Associated
person is then legally "associated" with that firm and they have to [Man holding arms up to police]
follow that firms standards and practices ethical codes and style guides
in not using pink color font on their letterhead so who is that person
it's a partner, an officer, a director, or a branch manager or even anyone
performing duties similar to the above that is it's a broad all-encompassing
definition of associated so that if friends of or dotted line partners to
the firm do bad things well then the long arm of the law has the right to go [Police officers chase man with horns on head]
after them with teeth well the first type of whispery associated person would
have been a lot more compelling sorry
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A member firm is a broker dealer wherein at least one of the key people who run the firm is a member of a major exchange, or player in an SRO.