Ch 4 Deck 1 Flashcards
All firms must be registered “members” of FINRA who
conduct securities transactions
Who regulates the securities industry.
Both the SEC and FINRA (as well as a few other SROs)
FINRA writes
rules for the securities industry
FINRA Enforces
securities regulations and laws within the securities industry
FINRA Trains
Securities Professionals
FINRA Oversees
member firm compliance
FINRA handles dispute resolution between
members, representatives and customers
“Associated person” is
a natural person who is registered at a member firm
“Associated persons” includes
registered reps
partners
officers
directors
Broker-dealers (BDs) must register with FINRA through Form
BD
Must register BD in state where
home office is located
A “representative” is also an
associated person
A “representative” is an associated person who is
engaged in the investment banking or securities business for a member
activities of investment banking or securities business that representatives are engaged in include
supervision
solicitation
conducting securities business
A BD’s registered reps must register in
the states that they conduct business
Registration package for registered reps is required for
every person who will be registered (those who will be conducting securities transactions)
Registration package for registered reps includes
U4
fingerprints
fees
U4 form must list basic info
Name and social security #
U4 must list employment history for
10 years
U4 must list bad background of
criminal convictions
guilty pleas
pleas of no contest
U4 must list financial background of
Bankruptcy
Compromise with creditors
Past 10 years
Updates to U4 must be submitted within
30 calendar days of relevant change
U4 must be updated for these against the broker
complaints
U4 must be updated for these involving the broker
settlements
U4 must be updated for these problems with broker
Criminal charges and convictions
U4 must be updated if these actions are taken against the broker
Regulatory actions
U4 must be updated if this happens to the broker
termination of the representative
Amendments to form BD must be made within
30 days of the change being reported in amendment
examples of form BD amendments are
address change
opening offices
closing offices
Must designate on form BD a principal to serve as
Chief Compliance Officer
On form BD, CEO must certify that supervisory processes are
in place
reviewed
maintained
tested
FINRA must give its answer to a form BD registration within
45 days
