Hiring New Employees

A registered principal of a firm will be the individual who interviews and screens potential new employees. They will be required to make a thorough investigation into the candidate’s professional and personal backgrounds. With few exceptions, other than clerical personnel, all new employees will be required to become registered as an associated person with the firm. Additionally, all employees of the broker dealer, who are involved in securities sales, have access to cash and securities, or who supervise employees, must be fingerprinted.

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New employees of NYSE member firms who are going to function as a registered representative who have not previously been engaged in the securities business must go through a four month training period prior to becoming registered. The exchange may waive the training or apprenticeship requirement for new employees who have been registered with other SROs or who demonstrate significant industry experience. The new employee will begin their registration process by filling out and submitting a Uniform Application for Securities Industry Registration, also known as Form U4. The Form U4 is used to collect the applicant’s personal and professional history including:

  • 10-year employment history
  • Five-year resident history
  • Legal name and any aliases used
  • Any legal or regulatory actions

The principal of the firm is required to verify the employment information for the last three years and must attest to the character of the applicant by signing Form U4 prior to its submission to FINRA. All U4 forms will be sent to the Central Registration Depository (CRD) for processing and recording. Any applicant who has answered yes to any of the questions on the form regarding their background must give a detailed explanation in the DRP pages attached to the form.

The applicant is not required to provide information regarding:

  • Marital status
  • Educational background
  • Income or net worth

Information regarding the employee’s finances that is disclosed on the U4 form includes if the associated person has ever declared bankruptcy or if they have any outstanding judgments or liens . Any development that would cause an answer on the associated person’s U4 to change requires that the member update the U4 within 30 days of when the member becomes informed of the event. In the case of an event that could cause the individual to become statutorily disqualified, such as a felony conviction or misdemeanor involving cash or securities, the member must update the associated person’s U4 within 10 business days of learning of the event.

RESIGNATION OF A REGISTERED REPRESENTATIVE

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