// Add the new slick-theme.css if you want the default styling
Beginning on July 9, 2018, FINRA is enhancing its disclosure
review process to enable it to conduct a public records search of information
relating to bankruptcies, judgments and liens, within fifteen calendar days
from the date of an applicant’s Form U4. These enhancements will allow FINRA to
verify the accuracy and completeness of an applicants’ information relating to all
bankruptcies, judgments and liens reported to the Central Registration
Depository (CRD) system through the Form U4. Currently, FINRA only conducts a
search of public financial records for all registered persons on an annual
basis.
If this search by FINRA reveals information different from
what was reported in an applicant’s Form U4, FINRA will notify the member firm
with which the applicant is associated within fifteen calendar days from the
date the Form U4 is filed. Then, if the firm files an amended Form U4 with the
updated disclosure, FINRA will not assess a late disclosure fee, as long as the
amended Form U4 is filed no later than 30 calendar days after the applicant
first learns of the event.
Member firms may also rely on FINRA’s new verification
process to comply with the requirement under FINRA Rule 3110(e), regarding the
responsibility of members to investigate applicants for registration by
conducting a search of public records relating to the applicant’s bankruptcies,
judgments and liens. Therefore, if a member firm does not receive notice from
FINRA regarding the results of its public records search within fifteen
calendar days after the filing of an applicant’s Form U4, the firm is deemed to
have satisfied its obligation to conduct a public records search of information
relating to bankruptcies, judgments and liens for that applicant.
These enhancements to the disclosure review process will
enable FINRA to verify the accuracy and completeness of information relating to
bankruptcies, judgments and liens in a more expedient manner. These
enhancements are also likely to reduce the costs to firms associated with
conducting these public records checks, will likely result in more timely
reporting of disclosure information to the benefit of regulators, investors and
firms, and result in a significant reduction of late disclosure fees related to
judgments and liens.