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What is a Form U5?
November 02, 2018
The Form U5 is the Uniform Termination Notice for Securities Industry Registration. Investment advisor firms must use the Form U5 to terminate with a state securities regulator the registration of an individual serving as an investment adviser representative. Similar to the Form U4, the Form U5 is filed electronically via the Web CRD.
Is the information on the Form U4 available to the public?
November 02, 2018
The Investment Adviser Public Disclosure (“IAPD) database allows public users to search for investment adviser representatives. The information published by the IAPD about the investment adviser representative includes qualifications, such as licenses, professional designations, and any exams passed; previous employment, including a list of firms where the investment adviser representative was previously registered, as well as any employment within the last ten years both inside and outside the securities industry; and a disclosure section which details any customer disputes or disciplinary events on the investment adviser representative’s record. The published information about the investment adviser representative is obtained through Form U4. Both the investment advisor firm and investment adviser representative are required to ensure the information on the Form U4 is accurate and up-to-date.
What happens to the Form U4 if an Investment Adviser Representative leaves a registered investment advisor firm and starts at another investment advisor firm?
November 02, 2018
As a general rule, when an investment adviser representative leaves an investment advisor firm, the former investment advisor firm will file a Form U5 disclosing the termination of the investment adviser representative’s affiliation as an investment adviser representative with the former investment advisor firm. The new investment advisor firm that the investment adviser representative joins will file a Form U4 registering the individual as an investment adviser representative of the new investment advisor firm. As long as the individual registering as an investment adviser representative has not gone more than 2 years between registrations as an investment adviser representative and there are no “yes” answers, the transfer is usually smooth. There may be application fees associated with registering with the new investment advisor firm.
What happens if the individual registering as an Investment Adviser Representative has a “yes” answer/disclosure event on the Form U4?
November 02, 2018
If the answers to any disclosure questions (i.e. criminal actions, regulatory disciplinary actions, customer complaints, arbitrations, civil litigation, termination, financial matters) on the Form U4 are “yes”, then the investment adviser representative is required to disclose additional details of the event or proceeding on the appropriate Disclosure Reporting Page (“DRP”) to the Form U4. Each category of items listed above has a unique DRP page asking for particular details of the disclosure event. Certain disclosure events will require multiple DRP updates. For example, when a matter arises (i.e. complaint received arbitration or litigation served, bankruptcy petition filed) and upon a change in the status or at final disposition of the matter (i.e. complaint settled, arbitration order issued, litigation settlement, bankruptcy discharged).
When does an Investment Adviser Representative need to update a Form U4?
November 02, 2018
Whenever there is a material change to information that should be disclosed on the Form U4, the investment adviser representative has an obligation to update promptly that information. Typically, this means filing an amended Form U4 within 30 days of the material change. Failure to do so can lead to fines, suspensions, or even being barred from acting as an investment adviser representative.
Do state securities regulators require an individual applying to register as an Investment Adviser Representative to submit a fingerprint card?
November 02, 2018
Although most state securities regulators do not require an investment adviser representative only applicant to submit fingerprint cards, the state securities regulators for Alaska, Arizona, District of Columbia, Georgia, Florida, Indiana, Maine and Ohio require fingerprint cards when registering as an investment adviser representative. In order to confirm whether a fingerprint card is required, an investment adviser representative applicant should review the most recent investment adviser representative registration requirements published by the applicable state securities regulator where he or she is requesting registration.
What information does an Investment Adviser Representative include on his or her Form U4?
November 02, 2018
The following is a list, not necessarily in order of the form, of information that needs to be provided by the investment adviser representative when completing a Form U4:
How does an Investment Adviser Representative submit a Form U4?
November 02, 2018
The Form U4 is submitted electronically to the state securities regulator by the investment advisor firm on behalf of the investment adviser representative through the investment advisor firm’s IARD/CRD account.
Are there state securities regulators that do not require filing a Form U4 for registration of an Investment Adviser Representative?
November 02, 2018
Yes, there are a few states such as New York and Wyoming that do not register individuals as investment adviser representatives and therefore do not require the filing of the Form U4. However, these state securities regulator may have an alternative requirements/filings related to minimum qualifications and designation of supervisors. For example, the New York Investor Protection Bureau requires an investment adviser representative of a state registered firm in New York to file the NY – IAQ. An investment advisor firm should consult the particular investment adviser representative rules of the securities regulator(s) in any state where the representative will conduct business.
