Why Webull Asks for My SSN When Opening an Account?

If you’ve recently submitted Webull’s online account opening form, you may have noticed that the broker requires a Social Security Number. You should not be alarmed at this policy. It is standard procedure among US-based financial companies to require a Social Security Number during the account opening process.

You will also be required to submit your name, date of birth, and address when opening any financial account. Furthermore, any brokerage account will require additional information about your trading experience. This type of request is required by industry regulations. For example, if you want to trade option contracts, you’ll have to provide information about your risk tolerance and investment goals. You’ll also need to state that you have read and understand the options disclosure booklet, another requirement of the brokerage industry.

Promotion


Open WeBull Account

Safety and Security

These requirements, while possibly a nuisance, are actually designed to protect individual investors. If people weren’t familiar with how to trade options, for example, and they were allowed to trade complex strategies, there’s a danger that they could be blown out of the water.


Margin Borrowing

Another reason why brokerage firms like Webull require an SSN is that applicants often apply for margin privileges, which represents a type of borrowing. If you borrowed money from a bank, of course you would have to supply your Social Security Number. A margin account is no different than borrowing money from a bank. Actually, brokers sometimes use banks to supply funds for their margin customers’ borrowing.


How to Open a WeBull Account


US Patriot Act

Another reason why Webull and other brokerage houses request Social Security Numbers is that they are required by US federal law to verify the identity of anyone who applies for an account. The government requires financial institutions to operate a Customer Identification Program through section 326 of the Patriot Act. According to this law, financial institutions are required to keep records of anyone who opens an account, and verify that an applicant is not on a government watchlist.

The Patriot Act allows financial institutions to verify customers through documentary and nondocumentary methods. This means a bank or brokerage firm could ask for a driver’s license (documentary method) or ask for a reference with another financial institution (nondocumentary).

A brokerage firm’s CIP must also have a recordkeeping system. This means that the information you include on your account application will be retained. Moreover, the company must keep vital data (name, Social Security Number, etc.) for at least five years after an account is closed.


Safety of Accounts

Webull uses advanced technology to fully encrypt its customers’ information. It does not share information with outside parties. As for the protection of funds, Webull is a member of SIPC, the primary insurance for US brokerage accounts. SIPC provides a maximum of $500,000 per account holder. Through its clearing firm, Webull provides a free supplemental policy with a $37.5 million limit per customer with a $150 million brokerage house limit.


Judgment

Webull is as safe as any other brokerage house.


Open Account


Open WeBull Account


Firstrade


Continue Reading