FINRA Manual: Contents
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91-73 Revised Forms U-4 and U-5 Go into Effect
Legal & Compliance
The SEC has approved changes to the Uniform Application for Securities Industry Registration or Transfer (Form U-4) and the Uniform Termination Notice for Securities Industry Registration (Form U-5). The changes to Form U-4 include the addition of new questions on page 3, as well as the inclusion of references to actions taken by foreign financial regulatory authorities. This change also occurs on Form U-5. In addition, both forms now contain a question regarding certification of reportable disciplinary information. Members should begin filing the new forms immediately.
The NASD, New York Stock Exchange, and North American Securities Administrators Association periodically review the registration and termination forms with the idea of streamlining the registration process or addressing areas that may have caused concerns for regulators and/or members and their associated persons. A recent review resulted in changes to Forms U-4 and U-5 to reflect new securities laws and to adopt a new program of certification of disciplinary information.
These proposed changes have now been approved by the SEC, and the newest versions of these filings are ready for use by industry. This notice contains the changes made to these filings and their impact or purpose.
CHANGES TO REFLECT AMENDMENTS TO SECURITIES LAWS
The Securities Acts Amendments of 1990 expanded the SEC's administrative authority and civil enforcement powers to include the ability to issue cease-and-desist orders and to impose monetary sanctions. To allow for disclosure of such sanctions, Item 22D5 has been added to page 3 of Form U-4.
The amendments also clarified that certain types of actions taken by foreign financial regulatory authorities are being deemed a Statutory Disqualification. To ensure full disclosure of these matters, "foreign financial regulatory authority" has been defined on page 3, and several of the questions on page 3 have been modified to include the notation of "foreign financial regulatory authority." You will note that this definition and clarification has also been added to Form U-5.
The registration process has always required the submission of full details for all reportable items relating to Item 22 of Form U-4. Over the years, this has led to multiple, repetitious disclosures of information that are all maintained in the Central Registration Depository (CRD) data base.
To streamline the registration process and eliminate duplicative filings, Item 220 has been added to allow certification of previously reported information. The question allows the individual to certify that all information in the CRD record relating to Item 22 is complete, accurate, and has been previously submitted on a Disclosure Reporting Page (DRP) format. If that is the case, the appropriate questions in Item 22 should be answered, but no new details need be submitted. Refer to Item 220 and the new instructions on the inside cover of Form U-4 for additional details to determine if this question can be utilized in effecting transfer of registration.
The ability to certify that all information relating to Items 13-15 on Form U-5 has been previously reported and that no new information needs to be filed has been added as Item 16. If the certification question is utilized, the appropriate answers to Items 13-15 should be provided, but no details will need to be provided on a DRP-5. Refer to Item 16 and the instructions on Form U-5 for additional information relating to this modification.
MINOR CHANGES TO FORM U-4
On page 1 of Form U-4, Item 11 has been updated to reflect the fact that Series 3 (Commodity Futures) and Series 5 (Interest Rate Options) are examinations only and do not correspond to classifications of registration. To clarify these requests, the word "Examination" has been added. Members should remember that checking either of these boxes (as well as the Series 63 and 65 examinations) will schedule a new examination, even if the exam has already been taken and passed. When transferring an associated person's registration, these boxes should not be checked unless you are intentionally requesting the exams.
Page 4 of the form has been modified to delete the statement that once required members to verify five years of employment for commodity registration. This deletion was based on the Commodity Futures Trading Commission's recent amendment to its rules that now requires only three years of employment verification.
As noted above, the changes to page 3 of Form U-4 and to Form U-5 contain new language required by law. Therefore, you should begin using these forms immediately and disregard prior versions. Effective February 1, 1992, only the current form will be acceptable. Copies of the new forms are included separately with this mailing for your convenience.
Questions about this notice should be addressed to Ellen Badler, Assistant Director, Special Registration Review, at (301) 590-6743. Additional copies of these forms may be requested by contacting NASD Member and Market Data Services at (301) 590-6500.