U4 Disclosure Updates: Cautionary Tales
Failure to timely update information on individual Form U4 disclosure may lead to potential fines and suspensions for a Registered Person. This is especially the case if the act was done intentionally.
Failure to timely update information on individual Form U4 disclosure may lead to potential fines and suspensions for a Registered Person. This is especially the case if the act was done intentionally.
It’s that time of the year again! As the fourth quarter ticks by, we have compiled a helpful end of year to-do list to aid small broker-dealers in addressing and closing out important annual compliance requirements.
The 2019 FINRA Renewal Program for Broker-Dealers, Investment Adviser Firms, Investment Adviser Agents, Investment Adviser Representatives, and Branches is scheduled to begin on November 12, 2018.
Firms should note the following key dates in the renewal 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.
In our previous blog on Registered Investment Advisers (RIAs), “How to Register as an RIA: What is a Registered Investment Adviser?”, we discussed some important basics of RIAs – how does one define an RIA, what is Fiduciary Duty, why do RIAs need to register, what is the difference between state registration and SEC registration, etc. Today, we will return to the topic of state registration vs. SEC registration in order to provide a more thorough examination of the issue.
[Continued from Crowdfunding: Funding Portal Registration – Part I]
Firms seeking to register as funding portals must do so via completion of an application process with FINRA. The registration process for a funding portal is similar to, but much less comprehensive and exhaustive, the New Member Registration process completed by applicants wishing to become broker-dealers.