Authorised signatory lists

Brokers, custodians and other service providers in the financial markets are often asked by their clients to comply with "authorised signatory lists" - lists of those personnel who are permitted by the client organisation to submit instructions, orders, and so on.

It might seem a sensible measure from the client's perspective, but what it really amounts to is an admission that you can't control your own employees. Brokers routinely decline such a request. If you're confronted with one here's a ready made letter you might use to explain why it won't do:

• While we understand your wish to ensure that your own employees comply with the internal policies, mandates and regulations which apply to them, ultimately it is your responsibility, and not ours, to make sure they do.

• Given the nature of our business and the way we price our offering, it is not practicable to verify on a trade-by-trade basis whether your employees have specific internal authorisation to commit your organisation to transactions with us.
• While we are a professional organisation and we do impose systems and controls to ensure that instructions are properly authorised and provided by persons generally empowered to issue them, we cannot police your policies on your behalf, much less underwrite your employees' compliance with them, and we therefore do not accept any purported restriction on your liability to perform transactions instructed by your personnel purely because they happen to be in breach of your internal mandates or authorisations.
• As between us, therefore, the presumption must be that losses (or gains) that arising from any such unauthorised orders originating within your organisation will be for your account.