Filing Membership Applications

Application Requirements and the Substantially Complete Review 

The Form NMA is an interactive, user-friendly document that provides a tailored application experience. The Form NMA is organized according to the standards for membership enumerated in NASD Rule 1014. The Form NMA contains 12 sections modeled after the first 12 standards of NASD Rule 1014:
 
Standard 1: Overview of the Applicant
Standard 2: Licenses and Registrations
Standard 3: Compliance with Securities Laws, Just and Equitable Principles of Trade
Standard 4: Contractual and Business Relationships
Standard 5: Facilities
Standard 6: Communications and Operational Systems
Standard 7: Maintaining Adequate Net Capital
Standard 8: Financial Controls
Standard 9: Written Procedures
Standard 10: Supervisory Structure
Standard 11: Books and Records
Standard 12: Continuing Education

 

The Form NMA does not elicit specific information regarding standards 13 and 14 of NASD Rule 1014. Applicants wishing to provide information they believe pertinent to either of these standards may do so by providing additional information in Standard 1.

 

The Form NMA identifies information required in the initial filing with a red asterisk (*) and also performs a completeness check. Applicants are required to address any missing items flagged during the completeness check before being permitted to submit the application.

 

Upon receipt of the submitted Form NMA, FINRA will conduct a review to determine whether the application is substantially complete. An application will be deemed "not substantially complete" if the initial submission does not contain attachments or information addressing the substance of the items designated as a mandatory item by the red asterisk (*).
 

Procedures for Applications Deemed Not Substantially Complete

Where the application for membership is deemed "not substantially complete", FINRA will reject the application and deem it to not have been filed. FINRA will send the Applicant a written notification of that determination, along with the reasons. FINRA also will refund the application fee, less a $500 processing fee. Furthermore, any fees already disbursed for state registration(s) and any other non-refundable fees (e.g., fingerprint processing fees) will not be returned. An Applicant that decides to continue seeking membership shall be required to submit a new application and fee. Applications that are not substantially complete will include, but are not limited to, applications with one or more of the following:

 

• Failure to submit a completed Form NMA and all attachments and information designated in the Form NMA as required;
   
• Failure to submit the necessary FINRA application fees;
   
• Use of an obsolete version of the Form BD;
   
• Failure to include an originally signed and properly notarized Form BD;
   
• Submission of illegible documents; and
   
• Failure to submit sufficient information and documentation to allow the staff to commence a meaningful review of the application.

 

New Member Application Processing

All new member applications are processed by the MAP Group. All general communications and inquiries regarding the processing of the Form NMA should be directed to the MAP Group at (212) 858-4000 (press 5 when the automated message begins).

 

Responsibility for oversight and examination of an approved firm will reside with the FINRA District Office in the District (located within the region) where the firm's principal place of business is located and/or with FINRA's Risk Oversight and Operational Regulation Office. New member applicants that are approved will be provided a Regulatory Coordinator contact from the respective office overseeing the new member as part of the new member approval process.

 

Form U4

The Form U4 (Uniform Application for Securities Industry Registration or Transfer) (PDF 530 KB ) is used by FINRA, other self-regulatory organizations (SROs) and states to elicit employment background, disciplinary and other information to register individuals with appropriate SRO(s) and/or jurisdiction(s). All registration data and requests, therefore, must appear in the appropriate areas of the Form U4. NASD Rule 1013 requires Applicants to file Forms U4 on behalf of proposed associated persons electronically with FINRA via the Central Registration Depository (CRD^® or Web CRD^® ). Information about associated filing fees, how to gain access to Web CRD through the Entitlement process and user support information are available on the CRD information page.

 

The Firm Gateway provides the appropriately entitled user with direct access to CRD within the Firm Gateway, without the need to separately log in to CRD. Applicants will file new and amended Forms U4, BD and BR using the Firm Gateway. Forms U5, BDW and Form CMA are also accessible via the Firm Gateway.

 

An initial Form U4 filed electronically with FINRA for an individual that has never been registered, or for an individual that has not been registered with a FINRA member within the preceding 30 calendar days, must include responses to all applicable sections of the Form U4. Applicants must complete a Disclosure Reporting Page (DRP) for each affirmative response to Section 14 (Disclosure Questions), if applicable, for the application to be considered complete. A Form U4 filed on behalf of an individual that has been FINRA-registered with another broker-dealer within the past 30 calendar days should complete all applicable sections (with the exception of Section 9 (Identifying Information/Name Change), Section 10 (Other Names), Section 11 (Residential History), Section 12 (Employment History) and Section 13 (Other Business)).

 

Note that an individual is under a continuing obligation to update within a specified time period changes to information required by Form U4 by filing an appropriate amendment electronically with Web CRD, as prescribed in Article V, Section 2 of the FINRA By-Laws. As stated in FINRA Rule 1010 and the instructions to the Form U4, the filing firm is obligated to retain and make available for inspection upon regulatory request a copy of the initial Form U4 and amendments to Disclosure Reporting Pages.

 

Tips for Filing the Form U4

• Upon approval of a member Applicant's Web CRD Entitlement request form, the Applicant must file Forms U4 electronically via Web CRD.
   
• If a person is not yet registered with a FINRA member firm and wants to become a registered person of the Applicant, the Applicant must, within two weeks of receiving Web CRD access, electronically file the Form U4 for such person. Receiving such information within this two-week window will enable FINRA staff to review the person's background information at an early stage in the application process.
   
• If a person already is registered with a FINRA member firm and wants to become a registered person of the Applicant, the Applicant may submit an electronic Form U4 on behalf of the person at any time prior to the approval of the membership application. If a currently registered person needs to take a qualifying examination, however, the Applicant must file the registered person's Form U4 early enough in the process to allow the registered person to take the necessary examination in a timely manner.
   
• Answer all applicable sections on the Form U4 and make sure information is complete.
   
• Provide a complete date (month, date, year) for the Employment Date in Section 1 (General Information).
   
• Provide the appropriate categories of registration for product and function types for the individual Applicant in Section 4 (SRO Registrations) and Section 5 (Jurisdiction Registrations). Registrations cannot be processed if the individual does not select at least one box in one of those sections. Note that fees are charged and examinations scheduled (if appropriate) according to the boxes checked in Sections 4 and 5.
   
• Provide multiple answers as needed for "Yes" answers to Section 10 (Other Names), Section 11 (Residential History), Section 12 (Employment History), and Section 13 (Other Business). (See also Form U4 checklist.)
   
• The individual Form U4 registrant and the appropriate signatory for the Applicant must each provide a manual, original signature in Section 15 of the Form U4.
   
• Refer to the Specific Instructions on the Form U4 for additional information. Applicants (as well as member firms) must keep filings of their registered personnel current at all times. (See Amending the Form U4.)

 

Form U4 and Other Fees

The membership application fee, as designated on Schedule A of the FINRA Bylaws, must be paid in order for the initial Form BD to be reviewed. Additional fees are incurred upon submission of Forms U4, based on the registration requests made in Section 4 (SRO Registrations) and Section 5 (Jurisdiction Registrations) of the Form U4, as well as on corresponding examination requests made in Section 7 (Examination Requests) and required by those registration requests. If the Applicant does not submit those fees with its initial application, the Applicant's Daily Account in Web CRD will be deficient. (See Web CRD Accounting.) The Applicant must satisfy the accounting deficiency before the Applicant and the individuals will be granted approval. To apply for FINRA registration, select the desired FINRA registration categories in Section 4 of Form U4. CRD automatically will schedule any necessary exams for the registrations selected.

 

Form BD

Applicants must file Form BD (the Uniform Application for Broker-Dealer Registration) to register with the SEC, SROs (including FINRA), and jurisdictions through Web CRD. A hard copy Form BD should be submitted to FINRA along with the Entitlement and other forms as set forth in the Introduction section of the FINRA How to Become a Member page of the FINRA website.

The initial Form BD must bear an original signature on behalf of the Applicant (mechanical reproductions are not acceptable) and the signature date field must reflect a complete month, day and year. Page 1 of the paper Form BD must be notarized and affixed with the notary's original signature and stamp or seal. Applicants should type or write in a legible manner, and should enter the Applicant's name at the top of each page of the filing.

All appropriate items on the Form BD must be answered completely except Item No. 4, which applies to sole proprietor applicants only. Complete details related to affirmative answers to Questions 1(C)(2), 5, 7, 8, 9, 10 or 13(B) must be provided on Schedule D to Form BD. Complete details regarding affirmative answers to Item No. 11 should be provided on the appropriate attached Disclosure Reporting Pages (DRP). Applicants should identify Schedule D and DRPs by item number. Attachment pages may be duplicated if more space is needed to report disclosure details on Schedule D.

In addition, Applicants must file appropriate Schedules A and/or B for all direct and indirect owners and partners. Individual CRD identification numbers must be supplied for each individual named on the schedules. Applicants should use additional copies of the schedules if one page is not sufficient to report the required information. NASD Rule 1013 requires new member Applicants to file (after completion of appropriate Entitlement forms) Forms U4 on behalf of proposed associated persons electronically with FINRA via Web CRD through the Firm Gateway.

A firm is under a continuing obligation to update within a specified time period changes to information required in the membership application, as well as changes to information required on Form BD (by filing an appropriate amendment electronically with Web CRD), as prescribed in Article IV, Section 1 of FINRA's By-Laws. To voluntarily withdraw a membership application, the Applicant must submit Form BDW electronically via Web CRD through the Firm Gateway.

The Applicant may contact the FINRA Call Center at (301) 590-6500 to be connected with appropriate staff in FINRA's Regulatory Review and Disclosure Department with any questions about Form BD filing requirements.

 

Filing Extensions

All specified deadlines for each of the milestones of the membership application process must be met (see NASD Rule 1010 Series for specific deadlines). If the Applicant believes it is unable to meet any deadlines, it may request an extension in writing explaining the reason to the FINRA staff processing the application. If the deadlines are not met, the application will lapse (i.e., terminate) absent a showing of good cause. Milestone deadlines are especially important to remember in the new membership process because membership fees are not refundable upon an application lapse.

 

Firm Name

Under Article IV, Section 2 of the FINRA By-Laws, a prospective or approved member may not use a firm name identical to that of an existing member, or one so similar that it will confuse or mislead others. Furthermore, pursuant to Section 709 of Title 18 of the United States Code, it is a criminal offense for a person or business entity engaged in the brokerage business to use the words "national," "Federal," "United States," "reserve" or "Deposit Insurance" as part of its business or firm name, unless otherwise allowed by law. Accordingly, new member Applicants are required to submit proposed broker-dealer names to FINRA's Regulatory Review and Disclosure Department for review to determine any conflicts with existing member names and compliance with federal law. New names, whether requested by applicants or by existing members that seek a name change, are subject to review as prescribed under the By-Laws. Firms should contact FINRA's Regulatory Review and Disclosure Department to request and reserve a proposed name before filing a new membership application (and existing members similarly are required to request and reserve a name before filing a Form BD amendment regarding a name change).

FINRA will deny use of unacceptable names. Proposed names are reviewed for compliance with federal law and for similarities in appearance, sound, connotation and commercial impression with the names of other FINRA member firms. Note that although services offered by two or more firms may differ in nature, scope or geographic location, these criteria, alone or in combination, do not provide a sufficient basis for approving a proposed name if it is too similar to that of an existing member. Applicants or member firms should not prematurely order stationery and other materials printed with a firm name until a name approval is received. Printing expenses will not justify acceptance of an unacceptable name. Moreover, although a name may be accepted by a state, regional or other agency or jurisdiction, this will not justify approval of an unacceptable name by FINRA if the name conflicts with any one of FINRA's international network of members.

Clearance for appropriate names will not be provided over the telephone. An Applicant or member firm must send, by mail or fax, a written request for clearance to reserve an acceptable firm name. Upon receipt of a written request, an acceptable firm name will be reserved for 120 days. The membership application (or Form BD amendment) should be filed during this name reservation period. If an application or amendment is not received within 120 days, the name clearance and reservation automatically will be cancelled.

 

For more information on the process of selecting a name or advice on the availability or propriety of selected names, applicants and member firms may contact FINRA's Regulatory Review and Disclosure Department at (301) 590-6500.

 

Filing Membership Applications—FAQ

As a consultant, how do I get access to Form NMA for my client?

After being duly delegated by its client, the Applicant, to access Form NMA on its behalf, the consultant should review the appropriate guidance in the Firm Gateway. FINRA strongly encourages prospective members to view the Form NMA in the Firm Gateway.

 

What is a "commercial courier"?

Under the NASD Rule 1010 Series, "commercial courier" means any delivery service engaged in the delivery of mail for profit. For example, bike delivery services, Federal Express and DHL are all commercial couriers for purposes of the NASD Rule 1010 Series. However, the U.S. Postal Service is not a commercial courier, but rather regular "mail." Since the Form NMA is submitted electronically, FINRA does not anticipate the need for firms to use a commercial courier to deliver documents in support of their applications

 
Since the Form NMA is submitted electronically, assuming the application is substantially complete upon filing, what date will be used as the date of filing?
Pursuant to NASD Rule 1012(a)(4), filing by an electronic system shall be deemed complete on the date specified in the confirmation page generated by the electronic filing system upon submission of the Form NMA. Please retain a copy of this page for future reference and as part of the Applicant's books and records.

If an Applicant has hired both an attorney and a consultant, who should represent the Applicant in dealing with FINRA staff?
Although the Applicant may retain multiple consultants or attorneys, it shall designate only one agent to act on its behalf during the membership application process. Whether an attorney or consultant, the designated agent will receive copies of all correspondence to the Applicant.