Resignation of a Registered Representative

If a registered representative voluntarily resigns or has their association with a member firm terminated for any reason, the member must fill out and submit a Uniform Termination Notice for Securities Industry Registration, known as Form U5. The member must submit the U5 to FINRA within 30 days of the termination. The member firm is also required to give a copy of the U5 to the representative upon termination. The member must also state the reason for the termination, either voluntary or for cause. An associated person’s registration is non-transferable. A representative may not simply move their registration from one firm to another. The employing firm that the representa­tive is leaving must fill out and submit a U5 to FINRA, which terminates the representative’s registration.  The new employing firm must fill out and submit a new U4 to begin a new registration for the associated person with the new employer. The new employer is required to obtain a copy of the U5 form filed by the old employing member either from the employee or directly from FINRA within 60 days of submitting the new U4. The previous employer is not required to provide a copy to the new member firm. If the new employing member asks the associated person for a copy of the U5, they have two business days to provide it. If the member requests a copy of the U5 from the agent who has not received a copy of their U5 from their old employer, the agent must promptly request it from their old employer, and must provide it to their new employer within two business days of receipt. A representative who leaves the industry for more than 24 months is required to re-qualify by exam. During a period of absence from the industry of two years or less FINRA retains jurisdiction over the representative in cases involving customer complaints and violations.

TAKE NOTE!

A firm may not allow an inactive agent to “park” their license with the firm and may not maintain an inactive agent’s license on the books simply to ensure that the agent does not have to re qualify by exam.  The one exception to the rule is for agents in the military who are called to active duty. While on active duty the agent’s registration will be “tolled” until they return.

Pass the Series 10 exam!

REGISTRATION EXEMPTIONS

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