SEC Provides Temporary Exemptive Relief from Fingerprinting Requirements for, Among Others, Members and All of Their Associated Persons; FINRA Provides Additional Temporary Extension of Time for Submission of Fingerprint Information for Registered Persons
On March 20, 2020, the Securities and Exchange Commission (the Commission) issued an order that, among other things, provides a temporary exemption until May 30, 2020 from the fingerprinting requirements of Securities Exchange Act Rule 17f-2 for FINRA members. As a condition of the relief, the Order requires written notification to the Commission by May 30, 2020, that a person will rely on the exemption. FINRA has provided that notification on behalf of all of its members, their employees and associated persons. With respect to an individual seeking registration pursuant to the submission of a Form U4, a FINRA member firm seeking to avail itself of this temporary exemptive relief for registered persons must comply with FINRA’s guidance with respect to FINRA Rule 1010, which is set forth below. A FINRA member firm seeking to avail itself of this temporary exemptive relief for non-registered associated persons (NRFs) must comply with the recordkeeping requirements set out in the guidance regarding NRFs below.
Temporary Extension of Time for Submission of Fingerprint Information for Persons Seeking Registration
Q. FINRA Rule 1010(d) requires members to submit fingerprint information for an individual applicant no later than 30 days after FINRA receives the applicant’s Form U4. In the interim, the individual’s registration may be deemed effective pending receipt of the fingerprint information. If the information is not submitted within 30 days, the individual’s registration is deemed inactive and the individual must immediately cease performing any registered activities. Due to the limitations and restrictions imposed as a result of the recent outbreak of coronavirus disease (COVID-19), our firm is unable to submit fingerprint information for applicants within the 30-day period under Rule 1010(d). Is FINRA considering extending the 30-day period to address this issue?
A. Yes. Due to the COVID-19 outbreak, the SEC recently issued an order providing temporary relief from the fingerprinting requirements of Section 17(f)(2) of the Exchange Act and SEA Rule 17f-2 for the period of March 16, 2020 until May 30, 2020. In addition, FINRA Rule 1010(d) authorizes FINRA to extend the 30-day period for submitting fingerprint information upon application and a showing of good cause. Given the Commission’s order, and the authority in Rule 1010, FINRA is temporarily extending the time period for submitting fingerprint information under Rule 1010(d). Specifically, members that submitted, or will submit, an applicant’s initial or transfer Form U4 between February 15, 2020 and May 30, 2020, will have until June 29, 2020 to submit the necessary fingerprint information. FINRA will continue to assess this situation and consider any additional extensions of time as appropriate.
Added March 24, 2020
Temporary Exemptive Relief for Submission of Fingerprint Information for Associated Persons Required to be Fingerprinted but Not Seeking Registration
Q. Will non-registered associated persons who are required to be fingerprinted (NRFs) also receive additional time to submit their fingerprint information?
A. Yes. Those individuals are subject to the SEC order providing a temporary exemption from the fingerprinting requirements of Section 17(f)(2) of the Exchange Act and SEA Rule 17f-2 thereunder until May 30, 2020, or such time that the SEC may extend its temporary relief. As a condition of the relief, the order requires written notification to the Commission by May 30, 2020, that a person will rely on the exemption. FINRA has provided that notification on behalf of all of its members and their associated persons, including NRFs. Member firms must maintain a record of those associated persons relying on the SEC’s exemptive relief. Such record must contain the hire date, and if applicable, the termination date of those associated persons.
Added April 10, 2020