GENERAL INSTRUCTIONS. The Form U4 is the Uniform Application for Securities Industry Registration or. Transfer. Representatives of broker-dealers. Registered individuals and firms share a continuing obligation to promptly update a registered representative’s (RR) Form U4 if any information changes or. Web CRD provides entitled users at Broker-Dealer and Investment Adviser firms with the ability to submit electronic filings of Form U4 to fulfill securities.
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Interestingly, however, advisers are not required to vote clients on behalf of clients.
Web CRD Quick Reference Guide on Form U4 |
If advisory firms take on that responsibility, however, then they must adopt the policies and procedures for voting and disclose them to clients. Firms were required to perform due diligence to ensure that the proxy voting firm could make its recommendations impartially and in the best interest of clients.
For many, the administration of the voting process and the research required to understand all the issues take too much time and effort without tinra clients much discernable benefit. Moreover, the Staff Legal Bulletin No. Contributed by Jaqueline M. Hummel, Partner and Managing Director. The proposed rule would apply to any Finrra structured as an open-end fund and would apply to both index-based and actively managed ETFs.
What is the Effect of a FINRA Form U4 or U5 Disclosure?
The proposed rule would not apply to unit investment trusts, ETFs structured as a share of a multi-class fund, corm leveraged and inverse ETFs. One of the goals of this draft is to make the standards more accessible to alternative investment managers and managers of pooled funds since many have not embraced the standards.
Other key concept changes in the Exposure Draft include a distinction between limited and broadly fonra funds.
The draft also provides more flexibility for showing performance. The draft allows GIPS firms to use different performance reports based on the type of investment vehicle: Comments can be submitted through December 31,and the adoption of the revised GIPS standards is planned for mid with an effective date of January 1, We are closely monitoring developments related ifnra the GIPS initiative and look forward to sharing additional details with you over the coming months.
Contributed by Cari A. The Pennsylvania Department of Banking and Securities issued a position letter on September 25, telling state-registered investment advisers and their investment adviser representatives to stop using client usernames and passwords to access client custody accounts.
Advisers currently using client usernames or passwords should take the following steps:. The deadline for compliance is October 25, Federally registered advisers should also pay attention to this notice. Although the SEC is the primary regulator for federally covered advisers, states can go after SEC-registered advisers for violations of state securities laws that amount to fraud.
Department Staff in Pennsylvania intend to initiate administrative actions against advisers if it spots them using client passwords and usernames after October 25, Contributed by Carolyn W.
For Broker-dealers and Registered Investment Advisers: Firms should submit any pending filings by end of business on September 28th cinra avoid having to re-generate new filings. It will incorporate consolidated registration and qualification rule changes, the new Securities Industry Essentials SIE exam, revisions to the representative-level qualification exams, changes to funra related information tinra displayed in CRD, as well as supporting changes to Forms U4 and U5.
To assist firms in requesting registrations on the Form U4 SRO Registration section, a feature will be added to CRD to auto-select valid registrations previously maintained.
Since our last updatewe received questions about whether participants in the new Financial Industry Affiliate Waiver Program will be required to complete Regulatory Element Continuing education during the seven-year waiver period? If yes, how will participants be notified of their continuing education obligations? Participants will continue to be subject to the Regulatory Element program and must complete vorm obligations during the day CE window.
Eligible individuals will be responsible for providing FINRA their contact information, including a valid email address, and for updating such information. Eligible individuals will also be responsible for paying the CE fee. Contributed by Rochelle A. Truzzi, Senior Compliance Consultant. Trading on a net basis is basically a principal transaction where the broker-dealer executes the purchase into inventory and the sale to the client simultaneously but at different prices.
These are similar to riskless principal transactions as a result of timing but do not meet the definition of riskless principal transaction due to the difference in price. These transactions must comply with the following Rules based on the net price of the transaction: If your firm trades in equity securities on a net basis, review the applicable section s of your Written Supervisory Procedures manual and ensure that the Rules listed above are addressed.
Destruction of records under such circumstances may result in SEC action against both the broker-dealer and the third party service provider. Please take a moment and review your contracts today. JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.
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FINRA and U4 reporting: do you have a target on your back?
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