Registration Requirements
Now that you know who qualifies as an agent, the next question is: how do they register, and what obligations follow?
State Registration
Agents must register in each state where they conduct business. The registration process requires:
- File Form U4 (Uniform Application for Securities Industry Registration or Transfer)
- Pass qualifying examinations, typically the Series 7 (general securities) plus the Series 63 or Series 66 (state law)
- Consent to service of process: allows the state administrator to receive legal documents on behalf of the agent
- Pay required fees as set by the state
- Disclose disciplinary history, customer complaints, and certain financial events (bankruptcies, liens, judgments)
The Broker-Dealer (BD)-Agent Link
An agent's registration is tied to their broker-dealer (BD). This creates several important rules:
- Registration is not effective during any period when the agent is not associated with a broker-dealer
- If an agent leaves their BD, registration is effectively suspended (sometimes called "parked") until they associate with a new firm
- An agent cannot conduct securities business between firms; there is no grace period
Think of it this way: A broker-dealer's license is like a backstage pass that only works while you're with the band. The moment you leave, you're back in the audience. No firm, no pass, no access.
Exam Tip: Gotchas
- No BD, no registration. An agent who quits their broker-dealer cannot continue soliciting clients while looking for a new firm. Their registration is inactive the moment the association ends.
- Consent to service of process is irrevocable. Once filed, it remains effective even after the agent leaves the state or the industry. This ensures the state retains jurisdiction for enforcement actions.
Post-Registration Requirements
Once registered, agents face ongoing compliance obligations:
- Comply with all state and federal securities laws at all times
- Update Form U4 promptly to reflect material changes (within 30 days for most events)
- Subject to examination and inspection by the state administrator
- Disclose any new disciplinary actions, customer complaints, criminal charges, and financial events (bankruptcies, liens, judgments over a certain threshold)
Termination Process
When an agent's association with a broker-dealer ends:
| Step | Form | Who Files | Deadline |
|---|---|---|---|
| Termination notice | Form U5 (Uniform Termination Notice for Securities Industry Registration) | The broker-dealer | Within 30 days of termination |
| Copy to agent | Form U5 | The broker-dealer sends a copy | Within 30 days |
| Copy to administrator | Form U5 | Filed through the Central Registration Depository (CRD) system | Simultaneously with filing |
- The agent and the state administrator both receive a copy of Form U5
- Registration expires when terminated by the broker-dealer or withdrawn by the agent
- The agent may dispute information on the Form U5 by adding a comment through the CRD
Form U4 vs. Form U5 at a Glance
| Feature | Form U4 | Form U5 |
|---|---|---|
| Purpose | Registration/transfer | Termination |
| Who files | Agent (through BD) | Broker-dealer |
| When | Beginning of association | End of association |
| Update requirement | Within 30 days of material changes | Filed within 30 days of termination |
| Key disclosures | Criminal history, financial events, customer complaints | Reason for termination, any internal review findings |
Exam Tip: Gotchas
- The broker-dealer files Form U5, not the agent. The departing agent does not file their own termination notice. The BD has 30 days to file it.
- 30 days is the magic number. Both Form U4 updates and Form U5 filings must happen within 30 days. This is a frequently tested threshold.
- Registration is state-by-state. An agent registered in three states who moves to a fourth must register in the new state before conducting business there. Registration in one state does not grant permission to operate in another.