Updating information on my u4
Newly required disclosures as to “regulatory actions” will require broker-dealers to circularize their representatives and go back and review Forms U-4 and U-5 already on file to amend those forms as needed.The new requirements also broaden required disclosures of arbitrations and civil litigation involving persons not named in the complaint but named or identified in the body of the complaint.This would include any final action by, essentially, any regulatory agency that would be required to be disclosed on Form U-4 or U-5.Consequences These changes are presented by FINRA as an attempt to enable regulators to more easily identify persons subject to statutory disqualification and to broaden the ambit of inquiry into “red flag” activities requiring heightened supervision by the broker-dealer.amends Forms U-4 and U-5 to add questions requiring disclosure of willful violations resulting in SEC or Commodity Futures Trading Commission (CFTC) regulatory actions and to make it easier to identify persons who are subject to a “statutory disqualification” requiring additional regulatory review.A “statutory disqualification” includes a willful violation of the federal securities laws, the Commodity Exchange Act, or the rules of the Municipal Securities Rulemaking Board.
For example, if broker X is named in a complaint as a defendant and broker Y is not named as a defendant or otherwise but is his or her supervisor, is broker Y “involved” in the “sales practice violation”?
On May 13, 2009 FINRA released Notice to Members (NTM) 09-23 as approved by the SEC in Release No. This NTM adopts two changes which affect the way registered broker-dealers and their representatives disclose information.
The amendments to Rule 8312 become effective May 18, 2009.
Failure to amend “no” to “yes” by November 14, 2009 for a particular representative will constitute a statement by the broker-dealer that “no” is the correct answer for that representative.
A “yes” answer will require a detailed explanation.