4.1 Registration

Registration Requirements

Understanding the registration process for securities professionals is essential for the SIE exam. This section covers the forms, requirements, and systems used to register and track associated persons.

Who Must Register?

Associated persons of broker-dealers must register with FINRA before engaging in securities business.

Associated Person Definition

An associated person includes anyone who:

- Engages in the securities business of a member firm

- Functions as a sole proprietor, partner, officer, or director

- Controls or is controlled by a member firm

- Is employed by a member firm

Registration Exemptions

Some individuals do not need to register:

- Clerical and administrative staff (non-securities functions)

- Persons whose functions are solely ministerial

- Back-office personnel not involved in sales

The SIE Exam

The Securities Industry Essentials (SIE) exam is the first step toward registration.

SIE Exam Features

Eligibility: Anyone 18 or older

Firm Sponsorship: Not required

Questions: 75 multiple-choice questions

Passing Score: 70

Time Limit: 1 hour 45 minutes

Results Valid: 4 years

Current format: FINRA allocates the 75 scored questions across the four outline sections as 12, 33, 23, and 7. The current content outline adds 5 unidentified, unscored pretest items, so each candidate answers 80 items in 1 hour 45 minutes.

SIE Alone Is Not Enough

Passing the SIE does not:

- Qualify you to conduct securities business

- Allow registration with a firm

- Permit solicitation of customers

You must also pass a representative-level exam (like Series 6 or 7) while sponsored by a firm.

Form U4: Uniform Application for Registration

Form U4 is used to register associated persons with FINRA and state regulators.

When Form U4 Is Filed

- New registration with a firm

- Transfer to a new firm

- Adding new registration categories

- Updating existing information

Information Required on Form U4

Personal Information: Name, date of birth, SSN

Residential History: 5-year address history

Employment History: 10-year work history

Registration Requests: Exam categories, states

Disclosure Questions: Criminal, regulatory, financial

Disclosure Questions

Form U4 requires disclosure of:

Criminal: Felonies, financial misdemeanors

Regulatory: SEC/FINRA actions, suspensions

Civil Judicial: Investment-related lawsuits

Customer Complaints: Arbitrations, settlements

Financial: Bankruptcies, liens, judgments

Important: False or misleading information on Form U4 is a serious violation that can result in fines, suspension, or bar from the industry.

Fingerprint Requirements

All registered persons must submit fingerprints for:

- FBI criminal background check

- State background checks

- Verification of identity

Form U5: Uniform Termination Notice

Form U5 is filed when an associated person leaves a firm.

When Form U5 Is Filed

Voluntary resignation: Within 30 days

Termination: Within 30 days

Leaving the industry: Within 30 days

Form U5 Contents

- Reason for termination

- Internal review disclosures

- Regulatory action disclosures

- Customer complaint disclosures

Termination Reasons

Voluntary: Resigned on own initiative

Permitted to Resign: Left amid investigation

Discharged: Fired by the firm

Deceased: Death of associated person

Note: Form U5 information becomes public on BrokerCheck.

Central Registration Depository (CRD)

The CRD is FINRA's electronic system for registration.

CRD Functions

Filing: Process U4 and U5 forms

Exam Enrollment: Schedule qualification exams

Records: Maintain registration data

CE Tracking: Monitor continuing education

Web CRD

Firms use Web CRD to:

- Submit registration forms electronically

- Update associated person information

- Pay registration fees

- Track registration status

FINRA BrokerCheck

BrokerCheck is FINRA's free public database.

What BrokerCheck Shows

Registration Status: Current licenses held

Employment History: Firm affiliations

Exams Passed: Qualifications

Disclosures: Complaints, regulatory actions

How to Access

- Online at brokercheck.finra.org

- Call FINRA's hotline

- Free to the public

Exam Tip: Investors should use BrokerCheck to research their financial professionals before doing business.

Registration Categories

Representative Registrations

Series 6: Investment Company Rep; Mutual funds, variable annuities

Series 7: General Securities Rep; Most securities

Series 63: State Agent; State law compliance

Series 65: Investment Adviser Rep; Advisory services

Series 66: Combined State; 63 + 65 combined

Principal Registrations

Series 24: General Securities Principal

Series 26: Investment Company Principal

Series 27: Financial and Operations Principal

Registration Maintenance

Keeping Registration Active

To maintain registration:

- Complete continuing education requirements

- Stay associated with a member firm

- Keep Form U4 information current

Registration Lapse

Leave industry less than 2 years: Exams remain valid

Leave industry 2-4 years: Must retake representative exam

Leave industry more than 4 years: Must retake SIE and representative exam

Updating Form U4

Firms must update Form U4 within 30 days when:

- Address changes

- Name changes

- New disclosures arise

- Employment status changes

Statutory Disqualification

Certain events can result in statutory disqualification from registration:

Felony conviction (10 years): Automatic disqualification

Securities-related misdemeanor: May be disqualified

Court injunctions: May be disqualified

SEC/SRO bar or suspension: Disqualified

False Form U4 statements: May be disqualified

Note: Firms can apply to employ statutorily disqualified persons through FINRA's eligibility process.

Key Takeaways

- SIE exam is open to anyone 18+, valid for 4 years

- Form U4 registers associated persons

- Form U5 terminates registration

- CRD is FINRA's electronic registration system

- BrokerCheck provides public access to broker information

- Registration lapses after 2+ years out of industry

- False U4/U5 information is a serious violation