Registration and Post-Registration Requirements

This section covers agent registration requirements under the Uniform Securities Act, what the Act requires in an application, Form U4 and the CRD system, the effective date of registration, and registration expiration.

It also covers post-registration obligations (the Act's "promptly" standard alongside FINRA's Form U4 and Form U5 deadlines), the two-year exam-validity rule, dual registration, the agent-versus-IAR comparison, the two-prong test for denial/suspension/revocation, and Administrator authority over agents.

Who Must Register as an Agent?

• It is unlawful for any person to transact business in a state as an agent unless registered under the Uniform Securities Act (USA)
• It is unlawful for any broker-dealer (BD) or issuer to employ an agent unless that agent is properly registered
• Both the agent AND the employing BD/issuer bear responsibility for proper registration

Is Agent Registration Tied to a Specific Employer?

• An agent's registration is not effective during any period when the agent is not associated with a particular registered BD or a particular issuer
• Registration is tied to the specific firm. Changing employers requires new registration
• When an agent begins or terminates a connection with a BD or issuer, all parties (agent, old employer, new employer) must promptly notify the Administrator

What Does the USA Require in a Registration Application?

The Uniform Securities Act (USA) itself specifies what a registration application must contain, including:

• The applicant's qualifications and business history
• Any injunction or administrative order, any conviction of a misdemeanor involving a security or any aspect of the securities business, and any conviction of a felony
• The applicant's financial condition and history

The Administrator may also require an applicant to pass a qualifying examination, and may require broker-dealers, agents, and investment advisers who have custody of or discretionary authority over client funds or securities to post a bond.

Exam Tip: Gotchas

Agents are not categorically exempt from bonding. The Administrator may require an agent to post a bond when that agent has custody or discretionary authority. A deposit of cash or securities is accepted in lieu of a bond.

What Is Form U4?

Form U4 (Uniform Application for Securities Industry Registration or Transfer) is the form used to register an agent, filed electronically through the CRD (Central Registration Depository) system.

Exam Tip: Gotchas

Form U4, Form U5, and their filing deadlines are FINRA/CRD requirements, not provisions of the Uniform Securities Act. FINRA rules are separately testable on this exam, so learn both, but keep the sources straight: a question that says "under the Uniform Securities Act" is asking about the Act's own rules, which set no day counts for amendments (see Post-Registration below).

• Required disclosures on Form U4:
  • Personal information and residential history
  • Employment history
  • Criminal history (Form U4 reaches charges as well as convictions; note the USA's own application requirement above is narrower, covering securities-related misdemeanor convictions and any felony conviction)
  • Regulatory actions by any domestic or foreign securities regulator
  • Civil judicial actions
  • Customer complaints, arbitrations, and settlements
  • Financial disclosures (bankruptcies, liens, judgments)
  • Termination details from prior employers

When Does Agent Registration Become Effective?

• If no denial order is in effect and no proceeding is pending, registration becomes effective on the 30th day at noon after the application is filed
• The Administrator may accelerate this and grant registration earlier than the 30th day
• The Administrator may also delay registration by initiating a proceeding to deny the application

Exam Tip: Gotchas

• The 30-day default is a maximum waiting period, not a minimum. The Administrator can make registration effective sooner.
• If the Administrator begins denial proceedings before the 30th day, registration does not become effective until the proceeding is resolved.

When Does Agent Registration Expire?

• Every agent registration expires December 31st unless renewed
• Agents must renew registration annually through the CRD system

How Do Agents Keep Filings Current After Registration?

Two different rules apply here, from two different sources. The exam tests both, so keep them apart.

Under the Uniform Securities Act (USA): if information in any document filed with the Administrator becomes inaccurate or incomplete in any material respect, the registrant must file a correcting amendment promptly. The Act sets no day count. "Promptly" is the standard.

Under FINRA rules (Form U4 via CRD): the amendment deadlines are specific:

Exam Tip: Gotchas

• If a question says "under the Uniform Securities Act," the answer about amendment timing is promptly, not 30 days. The 10-day and 30-day figures come from FINRA's By-Laws, and "statutory disqualification" is a Securities Exchange Act / FINRA concept that appears nowhere in the USA.
• A pending charge and a conviction are not the same trigger. Form U4 asks about criminal charges as well as convictions, so a felony charge must be reported (you do not wait for the case to resolve), but it goes on the ordinary 30-day clock. Statutory disqualification is conviction-based (plus regulatory bars, suspensions, injunctions, and revocations), so only those events start the shorter 10-day clock.
• The short clock is 10 days, not 10 business days. FINRA's wording is "not later than ten days after such disqualification occurs."
• Statutory disqualification is not a permanent, no-exceptions bar even under FINRA. A firm may sponsor a disqualified person through an eligibility proceeding, and FINRA may allow the association subject to a heightened-supervision plan.

What Happens to Registration When an Agent Terminates?

Under the USA: when an agent begins or terminates a connection with a BD or issuer, or begins or terminates the activities that make the person an agent, the agent and the BD/issuer must both promptly notify the Administrator. The Act imposes no Form U5 and no day count.

Under FINRA rules: Form U5 (Uniform Termination Notice for Securities Industry Registration) must be filed:

• Who files: The employer (BD or issuer), not the agent
• Deadline: Within 30 days of the individual's employment end date
• Filed via: CRD
• Contents: Must include reason for termination (voluntary, terminated, permitted to resign, other)

Exam Tip: Gotchas

• Form U5 is filed by the BD firm (not the individual) within 30 days of termination. That deadline is FINRA's; the USA's own termination rule is simply prompt notice to the Administrator by both parties.
• The agent's registration is not effective during any period when the agent is not associated with a registered BD or an issuer. So if the employing firm's registration is revoked, the agent's registration is not revoked, it just stops being effective until the agent joins another registered firm.

What Enforcement Authority Survives an Agent's Withdrawal?

When an agent withdraws their registration, the Administrator's enforcement authority does not end immediately.

Administrative enforcement after withdrawal:

• A withdrawal becomes effective 30 days after the application is filed, unless a proceeding is pending or is instituted within those 30 days
• Once withdrawal is effective, the Administrator may still institute a revocation or suspension proceeding for up to 1 year, but only on the willful-violation ground
• After 1 year, the Administrator cannot institute new revocation or suspension proceedings based on that registration

Exam Tip: Gotchas

• The 1-year post-withdrawal window is not a general grant of jurisdiction. It reaches only willful violations. A non-willful violation, however genuine, cannot be pursued once withdrawal is effective.

Criminal prosecution after withdrawal:

• Criminal violations can also be referred to the state attorney general for criminal prosecution
• Criminal prosecution has a separate statute of limitations (typically 5 years from the violation), which is the criminal SOL, not an extension of the Administrator's administrative enforcement window
• Criminal penalties upon conviction: up to $5,000 fine and up to 3 years imprisonment
• The Administrator does not directly prosecute criminal cases; that authority belongs to the state AG

Exam Tip: Gotchas

• The 1-year window is about the Administrator's administrative reach, and it closes. A common misconception is that the Administrator keeps jurisdiction indefinitely for serious misconduct. It does not: after 1 year, no new revocation or suspension proceeding can be instituted on that registration, whatever the violation. Within that year, the reach extends only to willful violations. The 5-year figure is the criminal prosecution statute of limitations, which belongs to the state attorney general and is not an extension of the Administrator's window.
• $5,000 fine and 3 years imprisonment are criminal court penalties, not administrative sanctions. The Administrator cannot impose jail time. Criminal penalties come from a court conviction after criminal prosecution.

What Is the Two-Year Exam Validity (Lapse) Rule?

This rule comes from NASAA exam-validity policy, not from the Uniform Securities Act. The USA's only registration-duration provisions are that registration expires December 31st unless renewed, and that it is not effective while the agent is unassociated with a registered firm.

• A terminated agent must re-associate with another firm within 2 years to keep their state-administered exam credit (Series 63, 65, 66) alive
• On the second anniversary of being unregistered, that exam credit lapses
• After lapse, the individual must retake and pass the qualifying exam to re-register

Exam Tip: Gotchas

• Do not attribute the 2-year lapse rule to the Uniform Securities Act. If a question asks what the USA says about how long a registration lasts, the answer is December 31st expiration plus the not-effective-while-unassociated rule.
• Each qualification has its own clock. The Series 7 has a 2-year window under FINRA rules. The SIE does not sit unused forever either: SIE credit is valid for 4 years. Continuous registration keeps these clocks from running.

Can an Agent Be Dually Registered?

• An individual may be dual-registered as both an agent (of a BD) and an investment adviser representative (IAR) (of an investment adviser)
• Dual registration allows an individual to:
  • Execute securities transactions (agent registration)
  • Provide investment advice for compensation (IAR registration)
• Each registration has separate requirements and must be maintained independently
• A BD whose advisory services are solely incidental to its BD business and receives no special compensation for advice is excluded from the investment adviser (IA) definition, but the agent registration still applies

Exam Tip: Gotchas

• An agent who also provides investment advice for a separate fee needs both registrations.
• An agent whose advice is incidental to BD activity and who receives no special compensation does not need IAR registration.

How Does an Agent Differ From an IAR?

Exam Tip: Gotchas

• Both agents and IARs file Form U4, and both registrations are employer-specific. The critical difference is WHO they represent and WHAT they do.
• An agent effects transactions; an IAR provides advice. The same individual can hold both registrations simultaneously.

What Are the Grounds for Denial, Suspension, or Revocation?

Denial, suspension, and revocation require a two-prong test. The Administrator may act only if both are satisfied:

1. The order is in the public interest, AND
2. A specific statutory ground applies

Neither prong alone is enough. The statutory grounds include:

• Filing an application that is incomplete in any material respect, or contains a false or misleading statement of material fact
• Willfully violating the USA, or the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, the Investment Company Act of 1940, or the Commodity Exchange Act
• Being convicted, within the past 10 years, of a misdemeanor involving a security or any aspect of the securities business, or of any felony
• Being enjoined by a court from engaging in the securities business
• Being subject to an order of the Administrator denying, suspending, or revoking registration
• Being subject to an adjudication or determination, within the past 10 years, by another state or federal regulator that the person willfully violated the law
• Engaging in dishonest or unethical business practices
• Being insolvent (unable to meet obligations as they come due)
• Not being qualified on the basis of training, experience, and knowledge
• Having failed to reasonably supervise agents (applies to BD employers)

Exam Tip: Gotchas

• Nothing under the USA is automatic. Every ground is discretionary ("the Administrator may") and every order still requires the separate public-interest finding. A felony conviction within 10 years is a powerful ground, but it is not a self-executing bar, and the Administrator is not required to deny. "Statutory disqualification," an automatic bar with no discretion, is a Securities Exchange Act / FINRA concept and does not exist in the USA.
• The Administrator cannot deny registration solely because the applicant lacks experience if the applicant is otherwise qualified. The standard is training, experience, AND knowledge; deficiency in one area can be offset by strength in another.
• The order-based ground names the Administrator's own orders. Conduct reached by a federal or another-state regulator is a separate ground, which requires an adjudication that the person willfully violated the law.

What Authority Does the Administrator Have Over Agents?

• The Administrator may require agents to pass a qualifying examination (e.g., Series 63, Series 65, Series 66)
• The Administrator may inspect the books and records of a BD relating to its agents
• The Administrator may issue a cease and desist order if an agent is engaged in violations of the USA
• The Administrator may summarily postpone or suspend a registration pending final determination of a proceeding. On entering the order, the Administrator must promptly notify the agent (and the employer) that the order was entered, the reasons for it, and that the matter will be set down for hearing within 15 days after receiving a written request
• Agents are subject to the USA antifraud provisions regardless of registration status or exemptions

Exam Tip: Gotchas

• There is no exemption from the antifraud provisions. Even if an individual is excluded from the definition of agent and does not need to register, they are still subject to the fraud prohibitions under the USA.
• Fraud provisions apply to ALL persons in ALL securities transactions.
• A summary order is the exception to the usual sequence. Ordinarily no order may be entered without prior notice, opportunity for hearing, and written findings of fact and conclusions of law. With a summary order, the suspension takes effect first and the hearing follows, but only if the agent requests one (or the Administrator orders one). If no hearing is requested and none is ordered, the order simply stays in effect until modified or vacated.

What Should You Check on Exam Day?

• Registration becomes effective the 30th day at noon after filing, unless the Administrator accelerates it or a denial proceeding is pending; registration expires every December 31 and must be renewed annually.
• Under the USA itself, correcting amendments and termination notices need only be filed "promptly." The Act sets no day count.
• FINRA layers on specific deadlines the USA does not have: 10 days for statutory disqualification events (convictions, bars, injunctions), 30 days for other reportable events (charges, address changes, complaints), and Form U5 within 30 days of termination, filed by the employer, not the agent.
• The two-year lapse rule for Series 63/65/66 exam credit comes from NASAA exam-validity policy, not the Uniform Securities Act.
• Denial, suspension, or revocation requires both a public-interest finding AND a specific statutory ground; neither prong alone is enough.
• After a withdrawal becomes effective, the Administrator can still pursue revocation or suspension for up to 1 year, but only on the willful-violation ground; criminal prosecution runs on a separate, unrelated statute of limitations.
• Agents remain subject to the USA's antifraud provisions regardless of registration status or any applicable exclusion.