Approved Changes to Forms U4 & U5

The SEC approved amendments to Forms U4 and U5 as well as FINRA Rule 8312 (FINRA BrokerCheck® Disclosure). See Regulatory Notice 09-23 for complete information. The amendments, among other things, include the addition of six new regulatory action disclosure questions (14C (6), (7) and (8) and 14E (5), (6) and (7)) that enables FINRA and other regulators to identify more readily persons subject to a particular category of statutory disqualification under the federal securities laws and the FINRA By-Laws.

The revised Forms were implemented in Web CRD® on May 18, 2009. The effective date for these changes — with the exception of the new regulatory action disclosure questions — was May 18, 2009. As discussed in more detail below, the effective date for the new regulatory action disclosure questions was November 14, 2009.

 

For additional information about the revised Forms, please review the answers to frequently asked questions.

Update Regarding Electronic Filing Requirements for Uniform Forms: The signature requirements associated with the filing of the uniform registration forms are found in FINRA Rule 1010 (formerly NASD Rule 1140) and on the respective forms. The effective date of FINRA Rule 1010 is July 27, 2009. Currently, a registered person’s signature is required on all initial Forms U4. Recently approved changes to Rule 1010 now permit a firm to file amendments to Form U4 disclosure information without obtaining the registered person’s manual signature if the firm uses reasonable efforts to:

 

(1) provide the registered person with a copy of the amended disclosure information prior to filing and
(2) obtain the registered person’s written acknowledgment (which may be electronic) prior to filing, that the information has been received and reviewed.

 

The rule change also requires a member, as part of its recordkeeping requirements, to retain the written acknowledgment in accordance with Securities Exchange Act Rule 17a-4(e)(1) and make it available promptly upon regulatory request. See Regulatory Notice 09-40 for more details.

 

Key Items Regarding the Forms Changes

 

  • Form U4 Amendments: All registered persons were required to answer the new regulatory action disclosure summary questions by November 14, 2009. Additionally, please note the following:
    • During the 180-day period between May 18 and November 14, 2009, firms were allowed to submit provisional 'no' answers in order to conduct the due diligence necessary to respond to the new disclosure questions. Any "no" answers filed during this 180-day period that were not amended before November 14, 2009, became final on that date, and the firm and registered person are deemed to have represented that the person has not been the subject of any finding addressed by the question(s).
       
    • Firms that use Web EFT will not be able to submit Form U4 amendments filings via Web EFT for any of their registered individuals who have not answered the new regulatory action disclosure questions. Once a registered individual answers the new questions, he/she will then be eligible for inclusion in a Web EFT filing.
       
  • Changes to Disclosure Reporting Pages (DRP): When editing a Form U4/U5 DRP, firm users will be required to amend the DRP in the current version (e.g., DRP Version 5/2009). As a result, certain fields on the amended DRP will not be pre-populated and will require users to re-enter applicable information.
     
  • Changes to Customer Complaint Disclosure Questions:
    1. Increase the threshold for reporting settlements of customer complaints, arbitrations or litigations from $10,000 to $15,000; and,

    2. Require firms to report allegations of sales practice violations made against a registered person in an arbitration or litigation in which that person is not named as a party.
     
  • Form U5 Amendments: Firms can amend the date of and reason for termination on Form U5.
     

 

Help & Resources

 

  • Frequently Asked Questions (FAQ) — View answers to FAQ regarding the approved changes to Forms U4 and U5, as well as system changes to Web CRD with Release 2009.2.
     
  • Unanswered Disclosure Questions Report — A firm may request from FINRA two free "ad hoc" reports that identify any registered individuals associated with the firm with unanswered Form U4 regulatory action disclosure questions. Firms should send their requests for the “Unanswered Disclosure Questions Report” to CRD Reports. The report will contain the names of registered individuals associated with the firm, the individuals’ CRD numbers and any of the six new U4 disclosure questions with a null answer.
     
  • Individual Forms DRP Mapping Guide — This document provides a summary of the fields that were mapped from the old DRP version to the new 2009 DRP version, which were modified with Web CRD Release 2009.2.
     
  • Copies of the revised Forms are available on this Web site.
     
  • Gateway Call Center — call (301) 869-6699 or email.

 

Last Updated: 1/22/2010