FINRA Enhances Disclosure Review Process

As I’m sure you already know from reading our previous blogs on the subject, FINRA Rule 3110(e) (Responsibility of Member to Investigate Applicants for Registration) requires that member firms must “ascertain by investigation the good character, business reputation, qualifications, and experience of an applicant” prior to submitting a Form U4 and requesting to associate and register such an applicant with the firm. However, as recently announced, FINRA has made enhancements to its disclosure review process that will make this verification easier than ever.  Such enhancements will allow member firms to rely upon FINRA’s verification process for purposes of compliance with the requirement to conduct a search of public records relating to bankruptcies, judgments and liens.

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Form U4

What is Form U4 and What Sections are on it?

Form U4 is the Uniform Application for Securities Industry Registration or Transfer.  Representatives of broker-dealers, investment advisers, or issuers of securities must fill out the Form U4 to become registered in the appropriate jurisdictions and/or SROs.  The form is filled out electronically within the Central Registration Depository (“CRD”) or the Investment Adviser Registration Depository (“IARD”). Read More…