Under the New Issue Rule, which individual is not considered a restricted person?

The New Issue Rule, also known as the “IPO Rule,” outlines who is considered a restricted person and thus cannot participate in the purchase of new offerings, specifically initial public offerings (IPOs). Restricted persons generally include members of the broker-dealer's firm, employees, and certain family members of these individuals.

The individual who is not considered a restricted person under this rule is the brother of a registered person of a broker-dealer who has an account with a different broker-dealer. This is because the restriction applies primarily to immediate family members who live in the same household as the registered person, or who are directly connected to the same firm. Since the brother maintains his account with a different broker-dealer, he does not fall under the New Issue Rule’s restrictions.

On the other hand, other choices involve individuals closely connected to the broker-dealer or the registered person: the portfolio manager and the registered person are inherently restricted because of their affiliations. Similarly, parents who live with a registered person are restricted due to the direct familial connection and shared residence. Hence, the brother in a different setup is the one who does not meet the criteria of a restricted person.