Authorized Signatures on Prime Brokerage Agreements

Auditors stepping carefully across thin ice, an illustration of an agreement resting on a doubtful signature

Updated October 2026. First published June 2024.

A prime brokerage agreement is only as good as the signature on it. If the person who signed an SIA-150 or an SIA-151 wasn't authorized to bind their firm, the agreement the whole relationship rests on may not hold when someone tests it: a disaffirmed trade, a dispute over a fail, or an examiner asking who approved the terms. Checking authority is cheap at signing and expensive later.

Why Authority Matters

Whether a signature binds a firm is a question of general contract and agency law, not a securities rule. In broad terms, a contract signed by someone without authority may be unenforceable against the firm, unless the firm later ratifies it or the other side reasonably relied on the signer's apparent authority. Those are fact-specific arguments that lawyers have after something has gone wrong. The operations goal is to never need them.

The regulatory side is supervision. FINRA Rule 3110 requires written supervisory procedures for the firm's business, and executing prime brokerage agreements is part of the business. An examiner who asks how the firm approves those agreements expects a procedure, a named approver, and records that show it was followed.

What to Check Before an Agreement Is Countersigned

The signer's authority, from the counterparty's own documents. Most firms ask for an incumbency certificate or an authorized signatory list, signed by an officer, that names who may sign agreements of this kind. Check the signer against it, not against an email signature block.
Your own signer. The same question applies on your side. The person countersigning should be on your firm's list for this agreement type.
The document version. An amendment applies to a specific SIA-150. Confirm it names the agreement and date actually on file.
The signature method. Under the federal ESIGN Act, a signature can't be denied legal effect only because it's electronic, but the method still has to show who signed and when. When 650 forged signatures cost $315K shows what happens when e-signature tools run without identity controls.

When Signers Change

Signing authority goes stale. The officer who signed a 2019 SIA-150 may have left the firm, and the counterparty contact who handled amendments may have moved on. That doesn't by itself undo an agreement signed with authority at the time, but it does mean the next amendment, renewal, or termination notice needs a current signer on both sides.

Two habits keep the record current:

Ask counterparties for an updated signatory list on a set schedule, and whenever their organization changes.
Keep the evidence of authority with the agreement itself: the incumbency certificate or list in force when it was signed. Rule 17a-4(b)(7) already requires keeping written agreements relating to the firm's business, and the proof of who could sign them belongs in the same file.

What an Examiner Will Ask For

Expect a request along these lines: for a sample of prime brokerage relationships, the executed SIA-150, every SIA-151, the F1SA for the accounts involved, and evidence that the firm checked who signed. What an examiner wants to see in a carrying agreement file covers how to keep that file ready.

Loffa's Prime Broker Integrated Network (PBIN) routes SIA-150 and SIA-151 forms between counterparties and validates them for completeness before they're sent for execution, so the signed version, its date, and its history stay in one place.