The SEC recently issued a National Exam Risk Alert to registered broker-dealers detailing many of the significant compliance risks that can arise as a result of the master/sub-account trading model. In addition, both FINRA and the SEC have announced that master/sub-account relationships and the regulatory issues arising out of direct market access are examination priorities. In this white paper, Ellen Zimiles, Alma Angotti and Jay Perlman outline several steps that broker-dealers in securities that have master/sub-account trading structures can take to ensure compliance with all applicable laws and regulations and address the risk presented by their customers.