Welcome to Associated Person Registration: the rules that decide which individuals working for a broker-dealer must register, what background checks the firm has to run, how Forms U4 and U5 move people in and out of the system, and how continuing education keeps a registration active.
Exam Weight: Part of 6% (~9 questions across Function 1)
What You'll Learn
In this unit, you'll cover:
- Associated Person (AP) Definition and Registration Framework: Who counts as an "associated person" under FINRA By-Laws Article I(rr), the two-tier associated-person registration test, and the two-principal minimum
- Pre-Hire Screening and Background Investigation: Background-investigation duties under the supervisory-system requirement, the SEC fingerprinting requirement, and the Form U4 disclosure history requirements
- Forms U4 and U5: Filing mechanics on the Central Registration Depository (CRD), the 30-day Form U5 termination filing, the 10-day amendment deadline for statutory disqualifying events, and predispute arbitration disclosure
- Registration Categories: Representative-level licenses (Series 6, 7, 79, 86/87, 57, 82, 99) and principal-level licenses (Series 24, 9/10, 27, 28, 4, 16, 26, 14)
- Registration Exemptions: Clerical/ministerial exemption, foreign associates, and the narrow order-taker rule
- Statutory Disqualification (SD) and Eligibility Proceedings: Securities Exchange Act (SEA) statutory-disqualification triggers, Form MC-400 application, the SD relief application requirement (SEC notice), and the FINRA Series 9520 eligibility-proceeding review by the National Adjudicatory Council (NAC)
- Heightened Supervision: When it is required, what terms it includes, and how it integrates with the firm's written supervisory procedures (WSPs)
- Continuing Education: Annual Regulatory Element by December 31 and the Firm Element written training plan
Why This Matters
The Series 24 exam tests three principal-level decisions:
- Identifying which individuals must register and which fall into the clerical or foreign-associate exemption
- Spotting when an event triggers statutory disqualification and what 10-day or 30-day filing window applies
- Designing CE programs and heightened-supervision plans that survive FINRA inspection
A 10-day filing missed on a felony conviction or a Form U5 left blank for a "permitted to resign" termination is a textbook regulatory event reporting enforcement case.
Let's start with who counts as an associated person and which of those associated persons must actually register.