FINRA Rule 3110(e): Form U4 Verification Process

In our August 31 post about FINRA Rule 3110(e) (Supervision: Responsibility of Member to Investigate Applicants for Registration), we discussed the necessity of background checks and the expected depth and breadth of the investigation process. Rule 3110(e) also requires that FINRA member firms adopt written procedures to verify the accuracy and completeness of the information in an applicant’s Form U4. Read More…

background checks

Background Checks – FINRA Rule 3110

FINRA Rule 3110(e) (Supervision: Responsibility of Member Firms to Investigate Applicants for Registration) dictates that member firms must “ascertain by investigation the good character, business reputation, qualifications, and experience of an applicant”. In other words, member firms are required to run thorough background checks on all sponsored applicants for registration.

Among other things, the information gained from a thorough investigation is used to update the applicant’s Form U4, Read More…

Broker-Dealer’s New Hire Process

A broker-dealer’s new hire process can be long and stressful.  It is always a firm’s goal to hire the best individual in the applicant pool.  Once a firm narrows down its search and decides on a hire, the process is long from over.  FINRA has established several regulations that must be followed during a broker-dealer’s new hire process.

Before Registration with FINRA

It is not enough to look at a new hire’s resume and interview them.  Even if you feel like the new hire is a good person.  FINRA Rule 3110 (e) mandates that all FINRA-member broker firms conduct background verifications for new Read More…