The following glossary of terms is intended only for use by BrokerCheck users to assist them in better understanding a BrokerCheck report. Please note that these terms may have slightly different or more specific meanings in other contexts.
Agent A term used by states to describe a person licensed to engage in the securities business in that state.
Arbitration A method to resolve a dispute where an unbiased person or persons (i.e., a panel of arbitrators) is appointed to hear and consider all sides of the dispute and provide a final and binding decision (referred to as an award).
Arbitrator An independent, neutral person chosen to resolve disputes between parties.
Arbitration Award An arbitrator's final, written decision.
Bond Typically refers to a long-term promissory note in which the issuer agrees to pay the owner a specific interest rate at regular intervals and then pay the face value on a set future date.
Branch Office Any location identified by any means to the public or customers as a location at which a brokerage firm conducts investment banking or securities business. For purposes of BrokerCheck and BrokerCheck reports: (1) any branch office listed is currently active/open for business; (2) a firm may have multiple branch offices; and (3) a broker may be located (i.e., conduct business) at more than one branch office.
Broker An individual who acts as an intermediary between a buyer and seller of securities and who executes such transactions.
Brokerage Firm/Broker-Dealer Firms registered with FINRA or a national securities exchange that act as securities dealers or brokers, or perform both functions.
BrokerCheck Report Reports provided as part of FINRA initiative that contain information about brokerage firms and brokers registered with FINRA or a national securities exchange to help investors determine whether to conduct, or continue to conduct, business with these brokerage firms and brokers. The information in these reports has been provided to the Central Registration Depository (CRD®) as part of the securities industry's registration and licensing processes.
Clearing Firm An organization affiliated with exchanges that completes securities transactions by taking care of validation, delivery and settlement. Clearing firms help ensure that executed trades are settled efficiently and within a specified time period. Also called a clearing corporation.
Corporation The most common form of business organization, it is chartered by a state and given many legal rights as an entity separate from its owners.
Central Registration Depository (CRD®) An online computerized system in which FINRA maintains the employment, qualification and disciplinary histories of more than 650,000 securities industry professionals and more than 5,000 brokerage firms that deal with the public.
CRD Number A unique number assigned to brokers and brokerage firms as part of their registration application with FINRA.
Customer Dispute A consumer-initiated complaint or investment-related arbitration proceeding brought against a broker and/or brokerage firm alleging sales practice violations, forgery, theft or misappropriation of funds.
Dealer Any person or company in the business of buying and selling securities for his or her own account, through a broker or otherwise. (See broker)
Disclosure Event An occurrence required to be reported as part of the FINRA licensing and registration process for brokers and brokerage firms. These events include criminal, regulatory and civil actions, as well as certain financial incidents.
Employment History The information reported by the broker on all jobs the broker has held in the last 10 years both in, and outside of, the securities industry (this may include periods of unemployment and education).
Exams The following is a sampling of the exams that may be displayed in BrokerCheck. This is not an all-inclusive list.
Assistant Representative - Order Processing - (Series 11) This examination is designed for persons associated with a firm who accept unsolicited customer orders for submission for execution by a firm. They cannot accept orders for municipal securities or direct participation programs.
Corporate Securities Limited Representative - (Series 62) This examination qualifies an individual as a representative for the sale of public offerings and/or private placements of corporate stocks, corporate bonds, rights, warrants, real estate investment trusts, collateralized mortgage obligations, and securities of closed-end companies registered pursuant to the Investment Company Act of 1940.
Direct Participation Programs Limited Representative (Series 22) Brokers in this limited category of registration are permitted to function in the solicitation, purchase and/or sale of programs that provide for flow-through tax consequences, such as oil and gas programs, real estate programs, and S corporation offerings.
Equity Trader Limited Representative (Series 55) Brokers in this category may trade equity and convertible debt securities on a principal or agency basis. The Series 7 (including the foreign modules) or the Series 62 is the prerequisite to the Series 55.
General Securities Representative (Series 7) This registration qualifies a candidate for the solicitation, purchase and/or sale of all securities products, including corporate securities, municipal securities, municipal fund securities, options, direct participation programs, investment company products and variable contracts.
Government Securities Limited Representative (Series 72) Brokers in this limited category of registration are permitted to transact a firm's business in Treasury securities, government agency securities and mortgage-backed securities.
Investment Company Products/Variable Contracts Limited Representative (Series 6) Brokers in this limited category of registration are permitted to function in the solicitation, purchase and/or sale of redeemable securities of companies registered pursuant to the Investment Company Act of 1940; securities of closed-end companies registered pursuant to the Investment Company Act of 1940 during the period of original distribution only; and variable contracts and insurance premium funding programs and other contracts issued by an insurance company.
Limited Representative-Private Securities Offerings Representative (Series 82) This examination qualifies an individual for the sale of private placement securities as part of a primary offering.
Municipal Securities Representative (Series 52) Brokers in this limited category of registration are permitted to transact a firm's business in municipal securities and municipal fund securities (e.g., 529 College Savings Plans, Local Government Investment Pools (LGIPs).
Registered Options Representative (Series 42) This examination tests the candidate's knowledge of options accounts, equity, debt, foreign currency and index options. This registration requires a concurrent registration as a Corporate Securities Limited Representative (Series 62).
Research Analyst (Series 86 and 87) This exam is appropriate for individuals who produce written or electronic communications that analyze equity securities or individual companies/industry sectors, and provide reasonably sufficient information upon which to base investment decisions.
Direct Participation Programs Limited Principal (Series 39) This qualifies an individual who will function as a principal for the solicitation, purchase and/or sale of programs that provide for flow-through tax consequences, such as oil and gas programs, real estate programs and S corporation offerings.
Financial and Operations Principal (Series 27) The Series 27 is required for the individual whose duties include final approval and responsibility for the accuracy of financial reports under financial responsibility rules.
General Securities Principal (Series 24) This examination qualifies individuals required to register as general securities principals in order to manage or supervise the firm's investment banking or securities business for corporate securities, direct participation programs, and investment company products/variable contracts.
General Securities Sales Supervisor (Series 9 and 10) This registration is appropriate for individuals required to register as principals to supervise sales activities in corporate, municipal and options securities, investment company products, variable contracts, and direct participation programs. In addition to branch office managers, regional and national sales managers may also register in this capacity.
Investment Company Products/Variable Contracts Limited Principal (Series 26) This examination qualifies an individual who will function as a principal for the solicitation, purchase and/or sale of redeemable securities of companies registered pursuant to the Investment Company Act of 1940; securities of closed-end companies registered pursuant to the Investment Company Act of 1940 during the period of original distribution only; and variable contracts and insurance premium funding programs and other contracts issued by an insurance company.
Introducing Broker/Dealer Financial and Operations Principal (Series 28) This examination is required for the individual responsible for the recordkeeping requirements of introducing firms that do not carry customer accounts or hold customer funds or securities.
Municipal Fund Securities Principal (Series 51) This examination is designed to test a candidate's knowledge of the rules and statutory provisions applicable specifically to municipal fund securities and the supervision of the activities of brokers effecting municipal fund securities transactions (e.g., 529 College Savings Plans, Local Government Investment Pools (LGIPs)).
Municipal Securities Principal (Series 53) This examination is designed to test a candidate's knowledge of the rules and statutory provisions applicable to a municipal securities broker or dealer and to the supervision of the activities of municipal securities representatives. This exam also enables the principal to supervise municipal fund securities (e.g., 529 College Savings Plans, Local Government Investment Pools (LGIPs).
Registered Options Principal (Series 4) This examination is required of an individual who will function as a registered options principal, compliance registered options principal, or senior registered options principal. The Series 4 tests the individual's knowledge of options trading, exchange rules, and regulations applicable to the trading of options contracts, as well as the rules of the Options Clearing Corporation.
Form BD (Uniform Application for Broker-Dealer Registration) Brokerage firms file Form BD to register with the SEC, FINRA, other self-regulatory organizations (SROs), states and/or jurisdictions.
Form BDW (Uniform Request for Broker-Dealer Withdrawal) Brokerage firms file Form BDW to withdraw their registrations with the SEC, FINRA, other self-regulatory organizations (SROs), states and/or jurisdictions.
Form U4 (Uniform Application for Securities Registration or Transfer) Brokerage firms file Form U4 to register their brokers with FINRA, other self-regulatory organizations (SROs), states and/or jurisdictions.
Form U5 (Uniform Termination Notice for Security Industry Registration) Brokerage firms file Form U5 to terminate a broker's registration with FINRA, other self-regulatory organizations (SROs), states and/or jurisdictions.
Form U6 (The Uniform Disciplinary Action Reporting Form) Regulators, states and/or jurisdictions use this form to report disciplinary actions against a broker or firm. FINRA uses Form U6 to report final arbitration awards against brokers and firms.
Inactive A status indicating that a firm or broker does not currently have an effective registration. An inactive status typically results when a firm or broker has not completed a registration requirement (e.g., a broker has not completed a continuing education requirement or an applicant for registration has failed to submit a fingerprint card within the required time period).
Indirect Owner A person who has the power to indirectly influence the management or policies of a brokerage firm, whether through ownership of securities, by contract, or otherwise.
Introducing Firm A brokerage firm that can perform all of the functions of a broker except accept money, securities, or property from a customer.
Investigation A disclosure event that may include inquiries before a grand jury or regulatory authority (i.e., U.S. Securities and Exchange Commission, FINRA or another self-regulatory organization, or a state securities agency).
Investment Adviser Public Disclosure (IAPD) Website A Securities and Exchange Commission sponsored website that provides public users access to registration and disclosure information about investment adviser firms and investment adviser representatives.
Judgment A court's final determination of the rights and obligations of the parties involved in a court proceeding.
Lien A legal right or interest that a creditor has in another's property, usually lasting until the debt or duty that it secures is satisfied.
Limited Liability Company (LLC) A type of company deliberately formed (consistent with state laws) to provide its owners and managers with limited liability and certain tax benefits.
Municipal Securities Broker A broker engaged in the business of effecting transactions in municipal securities for the account of others.
Municipal Securities Dealer Any person (including a separately identifiable department or division of a bank) engaged in the business of buying and selling municipal securities for his own account.
Organization Affiliates A person (may be a natural person or an entity) named on a Form BD as a control person that either:
- directly or indirectly controls,
- is under common control with,
- or is controlled by the firm, including any current employees who perform executive duties or have senior policy making authority.
Partnership A type of unincorporated business organization in which multiple individuals manage the business, share in the profits (or losses) of the undertaking, and are responsible for its debts and liabilities. Partnerships typically are governed by agreements that establish the extent of each partner's responsibilities and/or liabilities.
Registration Category A designation of the type of work a broker or brokerage firm is licensed to perform. For example, registration categories for a broker can include General Securities Representative or Principal.
SEC Number A unique identification number assigned to a firm by the Securities and Exchange Commission.
Security A type of investment issued by a corporation, government or other organization that offers evidence of debt or equity.
Self-Regulatory Organization (SRO) An entity, such as FINRA, responsible for regulating its members by adopting and enforcing rules that govern its members' business conduct.
Sole Proprietorship A business fully owned and run by one person.
State Law Exams
Uniform Combined State Law Examination (Series 66) [North American Securities Administrators Association] The Series 66 is designed to qualify candidates as both securities agents and investment adviser representatives. The Series 7 is a co-requisite exam that needs to be successfully completed in addition to the Series 66 exam before a candidate can register with a state. For more information, see the North American Securities Administrators Association website.
Uniform Investment Adviser Law Examination (Series 65) [North American Securities Administrators Association] The Series 65 is designed to qualify candidates as investment adviser representatives. For more information, see the North American Securities Administrators Association website.
Uniform Securities Agent State Law Examination (Series 63) [North American Securities Administrators Association] The Series 63 exam is designed to qualify candidates as securities agents. The examination covers the principles of state securities regulation reflected in the Uniform Securities Act. For more information, see the North American Securities Administrators Association website.
Succession History A brokerage firm's record of the acquisition, ownership and right to manage another firm's assets and liabilities.
Suspended A status indicating that a firm or a broker has been precluded from engaging in the investment banking or securities business generally or from engaging in a particular function (e.g., supervising others), usually as a result of a regulatory action.
U.S. Government Securities Broker Any person regularly engaged in the business of effecting transactions in government securities for the account of others.
U.S. Government Securities Dealer Any person engaged in the business of buying and selling government securities for his own account through a broker or otherwise.