The Financial Industry Regulatory Authority, otherwise known as FINRA is a Self-Regulatory Organization (SRO) that reports to the Securities Exchange Commission (SEC). FINRA’s Central Registration Depository System (CRD) is used as a registration database. Its main purpose is to keep the information of the firm and its registered persons in order and is accomplished through various form filings.

Form filing is essential so that FINRA can perform its regulatory oversight of the industry. My staff and I can assist your broker-dealer with the various form filings required, whether during your formation phase or in an ongoing manner as part of my broker-dealer compliance retainer program.  

While FINRA normally does not have oversight jurisdiction over RIA firms (Registered Investment Advisors) (it has indirectly only when the RIA firm is also a FINRA member broker-dealer) it has been asked by the SEC and the state securities regulators to administer the Investment Advisor Registration Depository System (IARD) and I can provide similar IARD support for RIA firms.

The Form BD and the Form BDW are used by broker-dealers to register or to withdraw their registration with the SEC, SROs, and state jurisdictions. Initial filings are made when starting a broker-dealer and amendment filings are used to change or add information and registrations.

Whether you’re creating a broker-dealer or maintaining one, the Form BD must always be accurate. An inaccurate Form BD is low hanging fruit for aggressive regulators seeking to ensure job security.

The Form BD contains information such as your broker-dealer’s address and contact information, legal status, clearing arrangements (if applicable), business affiliates, disclosure information, business types, branches and its direct and indirect owners.

The Form BR is used by broker-dealers for branch office registration, notification, closing or withdrawal. The need for a branch office and the type of branch is determined by the functions to be performed at the office.

Interestingly (at least to me!) is that broker-dealers with a single office must file both a Form BD and a Form BR, as the main office, referred to as the Main Office of Supervisory Jurisdiction or OSJ, falls within the definition of “Branch Office” so both forms are required to be filed and maintained current (The IARD system mentioned above for RIAs has as its main document the Form ADV).

I can assist in the initial filings if you’re forming a broker-dealer or creating an investment advisor, as well as provide ongoing maintenance in both areas.

FINRA requires persons associated with a broker-dealer who will be engaged in the firm’s securities or investment banking business to be registered. The Form U4 and the Form U5 are used by broker-dealers to register and terminate, respectively, the registrations of associated persons with SROs and jurisdictions.

Filing a Form U4 begins an individual’s relationship with FINRA and his or her formal association with the broker-dealer. The Form U4 details the associated person’s registration and/or transfer information, identification information, residential and employment history and disclosure information, as well as the individual’s securities licenses, such as the Series 7 or Series 24.  

The topic of licenses and examinations are covered elsewhere, but for now it is worthwhile to note that the SEC approved the consolidation of certain FINRA registration rules that had the effect of restructuring the representative-level qualification examinations.

Most noteworthy is the creation of general knowledge examination called the Securities Industry Essentials or SIE. Additionally, the representative-level examinations were narrowed further into specialized knowledge examinations. Finally, a predictable result of the above was amendments to the Continuing Education (“CE”) requirements. These changes became effective October 1, 2018.

The Form U5 ends a representative’s relationship with FINRA and terminates associations between individuals and firms. It may be used to partially remove specific licenses or state registrations as well.

A “page 2 lite” (my term) is really a partial U4 and is used for those individuals with positions of responsibility that do not need registrations. Essentially, where the individual is not conducting securities related business or supervising such business, but is nonetheless involved to an extent where FINRA would require a background check and that person to be fingerprinted, hence the term Non Registered Fingerprint person or NRF. A passive owner, whether directly or indirectly who has a substantial ownership interest would most likely end up as a NRF person.

Although the Form BD and Form U4 filings are used by broker-dealers and their registered representatives to make application for state registrations, not all states give immediate approval. Each state has its own set of requirements and may ask for additional items and documentation from a broker-dealer and/or individual registered representative.

Such items may include, but are not limited to, financial statements, various affidavits and disclosure information if applicable.

A state may require individuals to hold specific licenses and/or have certain securities experience. Some states have a time requirement in which a broker-dealer and/or individual registered representative must produce all requested documentation.

Whether as part of my broker-dealer compliance retainer program, or on an as needed basis, my staff and I can assist with everything registration/CRD/IARD related.

Whether as part of my broker-dealer compliance retainer program, or on an as needed basis, my staff and I can assist your broker-dealer (and investment advisor) with annual registration renewals and ongoing Form BD and Form U-4 registration requirements.

The FINRA registration renewal program facilitates the annual renewal of broker-dealer firms’ registrations, and those of their registered representatives' FINRA, state/jurisdiction and SRO registrations. This annual program simplifies the registration renewal process with the payment of one amount to FINRA.

Prior to the generation of Preliminary Renewal Statements, my staff and I will send reminders for firms to review their registered persons to ensure that they have properly and timely reported all appropriate information to Web CRD and that all open branch offices have individuals assigned to them and are reported accurately.

At this time, firms will have the opportunity to submit a post-dated Form U5, Form BDW, and Form BR Closing/Withdrawal via Web CRD.

Submitting post-dated forms will prevent firms for being charged for registrations they no longer need in the upcoming year. My staff and I will assist firms in filing these forms and with meeting important deadlines to avoid unnecessary late fees. Fees incurred for new registrations requests filed after preliminary statements are produced will be reflected on a firm’s final renewal statement.

At the end of the process I will provide firms with a copy of their Final Renewal Statement along with detailed funding instructions. You should not be overwhelmed. In this area, my staff and I will be there to assist your broker-dealer through every step of this multi-month renewal process.

Whether as part of my investment advisor compliance retainer program, or on an as needed basis, my staff and I can assist your investment advisor with annual registration renewals and ongoing Form ADV, Form U-4 and Form U5 registration requirements. We can also administer the IARD Account as a Super Account Administrator. As explained elsewhere, we do the same for broker-dealers via the FINRA Web CRD system.