Authorised signatory lists: Difference between revisions

}}{{c|design}}In a marvellous example of a [[Don’t take a piece of paper to a knife fight|quixotic attempt at risk control by legal contract]], {{tag|broker}}s, {{tag|custodian}}s and other {{tag|service provider}}s in the financial markets are often sent “authorised signatory lists” by their clients of personnel who are permitted by the client to submit instructions, orders, and so on. Usually these are couched with a warning:

Now this might seem a sensible measure, from the client’s perspective, but [[broker]]s generally hate it, and with good reason. For what it really amounts to is the client’s admission that it doesn’t trust, or can’t control, its own employees. Rather than doing this itself, it is asking its counterparties to do this for it, at their own cost, expense and liability. Stuff ''that'' for a game of soldiers.

''Everything'' about authorised signatory lists is wrong, poor, and unbecoming of a professional financial services organisation. That these are even proposed, let alone accepted, is indicative of what is so messed up about risk management and legal practice in the financial services industry. The answer is not to wash your hands of your own problems by burying something in a notice — which, odds on you won’t update, giving you a free option to walk away from any trade a subsequently-authorised trader places, since you know your broker will accept it — but to actually monitor your employees properly. What with modern technology it is not exactly hard to do.