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89-13 Access to Disciplinary Information on Prospective Employees


Senior Management
Legal & Compliance

*These are suggested departments only. Others may be appropriate for your firm.


Effective February 6, 1989, members may obtain disciplinary information on prospective employees either through the Firm Access Query System (FAQS) or by submitting a written request to the NASD. Before accessing this information, a member must obtain written consent from the individual permitting access to this information.


The NASD Board of Governors, in implementing the recommendations of the Regulatory Review Task Force, re-emphasized the NASD's policy that a member adequately research the background of its potential employees. To assist member firms in fulfilling this requirement, the NASD's Registration Committee concluded that members should be permitted to access the disciplinary information of prospective employees maintained by the Central Registration Depository (CRD). The Registration Committee also said firms that subscribe to the Firm Access Query System (FAQS) may use that service to access this information. Access to the disciplinary records of prospective employees will be made available to members beginning February 6, 1989.


Prior to receiving disciplinary information on a prospective employee, members must obtain written consent from the individual. This consent, which may take any written form, should contain language that specifies the individual has given his or her consent for the member to review the person's background, including disciplinary matters, through CRD. The consent must be signed by the prospective employee. Page 4 of Form U-4, the Uniform Application for Securities Industry Registration or Transfer, contains appropriate language and, if signed by the prospective employee prior to the member's inquiry, would meet the prior consent standard.

Members that subscribe to FAQS will be allowed access to the disciplinary history of a prospective employee after certifying, through the electronic system, that the individual is being considered for employment and that the member has written consent from the individual on file. FAQS subscribers are required to maintain a copy of the individual's consent in their files.

Member firms that do not subscribe to FAQS may call NASD Information Services at (301) 590-6500 to request information on a prospective employee's disciplinary history. The member will be asked for its firm CRD number and the CRD or Social Security number of the individual under consideration for employment. Members will be informed if there is or isn't any disciplinary information on the individual's record. If the member wants a copy of the prospective employee's disciplinary history, a written request and a copy of the individual's signed consent should be forwarded to:
Attn: SRR Special Services
9513 Key West Avenue
Rockville.MD 20850

Instructions for accessing the CRD records of prospective employees are being sent to all FAQS subscribers. Firms interested in subscribing to FAQS are urged to contact Melissa Wimberly at (301) 590-6862 for details. Questions regarding this notice may be directed to Ellen J. Badler at (301) 590-6743.

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