Regulatory Notice 09-23

SEC Approval of Proposed Changes to Forms U4 and U5 and FINRA Rule 8312 (FINRA BrokerCheck Disclosure); Effective Date: May 18, 2009; Effective Date (Regulatory Action Disclosure Questions): November 14, 2009

Executive Summary

The SEC recently approved amendments to Forms U4 and U5 as well as FINRA Rule 8312 (FINRA BrokerCheck® Disclosure). The amendments, among other things, make significant changes to disclosure questions on the Forms, including the addition of questions about certain regulatory actions. The new regulatory action questions will enable 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. Other amendments to the Forms include:

  • new questions that require firms to report allegations of sales practice violations made against a registered person in an arbitration or litigation in which the registered person is not a named party; and
  • an increase in the monetary threshold for reporting settlements of customer complaints, arbitrations or litigation from$10,000 to $15,000.

The revised Forms will be implemented in the Central Registration Depository (CRD® or CRD system) on May 18, 2009. The effective date for most of these changes (i.e., the Forms changes and the amendment to FINRA Rule 8312)—with the exception of the new regulatory action disclosure questions—is May 18, 2009 (the "release date"). As discussed in more detail below, the effective date for the new regulatory action disclosure questions will be 180 days from the release date, or November 14, 2009.

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