5.e

Question 1

What is the purpose of Form U4?

Answer 1

Form U4 is used to register an associated person with FINRA. The form is filled out by the individual and submitted by the member firm. Registration is not effective until the person passes the required exam(s).

Question 2

Name three key pieces of information required on Form U4. What is not required?

Answer 2

Required:
* Name and any aliases
* 5-year residency history
* 10-year employment history
* Information on any charges, arrests, or convictions related to the investment business.

Not Required:
* Marital status
* Educational background (degrees)

Question 3

If information on a Form U4 changes, how soon must an amended U4 be filed? What if the change involves a statutory disqualification?

Answer 3

• Standard Changes: An amended U4 must be filed within 30 days.
• Statutory Disqualification: An amended U4 must be filed within 10 business days.

Question 4

Who at a member firm is required to be fingerprinted?

Answer 4

All employees, directors, officers, and partners involved in securities sales or who handle cash or customer securities.

Clerical staff are generally exempt unless their duties put them in contact with cash or securities (like handling incoming mail).

Question 5

Name two events that would automatically disqualify an individual from registering in the securities industry.

Answer 5

1. A felony conviction (or a securities-related misdemeanor) within the last 10 years.
2. Willfully making misstatements on the application (Form U4).
3. Being barred, suspended, or expelled by the SEC or another SRO.

(Note: Bankruptcy or an unsatisfied lien is NOT a statutory disqualification, but failing to disclose it is.)

Question 6

What is the purpose of Form U5, and how soon must it be filed after a registered person terminates their employment?

Answer 6

• Purpose: To terminate a registered person’s association with a member firm.
• Timeline: The firm must file the Form U5 with FINRA within 30 days of the termination date. A copy must also be sent to the former employee.

Question 7

After a registered person terminates their employment, how long do they have to re-affiliate with another member firm without having to retake their qualification exams?

Answer 7

Two years.

During this two-year period, FINRA also retains jurisdiction over the individual. If they do not re-register within two years, their top-off licenses expire.

Question 8

What is the Regulatory Element of Continuing Education?

Answer 8

A computer-based training session created by FINRA that must be completed annually by all registered persons. If a person fails to complete it, their registration becomes CE Inactive, and they cannot engage in any securities business until it is completed.

Question 9

What is the Firm Element of Continuing Education?

Answer 9

An annual, in-house training program prepared by the member firm. The training must be given to all registered persons who have direct contact with the public and should be relevant to their duties and recent regulatory developments.