Quick Answer
Registration status controls what you may do at a member firm: registered persons sell and advise, non-registered persons handle clerical tasks only. Registered persons pass the Securities Industry Essentials (SIE) plus a top-off exam, file Form U4, and stay current through annual continuing education. Felonies, securities misdemeanors, and pending indictments can block association.
The whole unit on one sheet: who can register, what keeps them qualified, and what shuts the door.
Registered vs. Non-Registered Persons
- Registered person: passed the SIE plus a top-off exam, registered through a member firm, filed Form U4 (Uniform Application for Securities Industry Registration). May solicit, recommend, execute trades, supervise, and open accounts.
- Non-registered person: affiliated with the firm but with no active registration. Limited to clerical and administrative functions.
- Non-registered persons can accept an unsolicited order only if forwarded immediately to a registered person, and distribute only pre-approved marketing materials.
- Rule of thumb: persuading a customer or deciding about their money needs registration; purely mechanical tasks do not.
SRO Qualification and Registration
- All persons associated with a member firm who do securities business must register with the Financial Industry Regulatory Authority (FINRA). No self-registration: a firm sponsorship is required.
- Four steps: pass the SIE (open to anyone 18+, no sponsorship), pass a top-off exam (Series 7, 6, 79, or 57), file Form U4, obtain firm sponsorship.
- Form U4 is filed by the firm through the CRD (Central Registration Depository) system, disclosing 10-year employment history, 5-year residential history, and criminal, regulatory, civil, and complaint records.
- The firm's own background investigation covers at least 3 years of employment and residences (shorter than the U4 disclosure).
- Fingerprinting is an SEC requirement (not FINRA); prints go to the FBI.
Continuing Education (CE)
- Regulatory Element: administered by FINRA, annual, tailored to registration category, delivered online. Non-completion makes registration CE inactive.
- Firm Element: run by the member firm, at least annually, requires a written needs analysis. Anti-money laundering (AML) training and the annual compliance meeting can count.
- Both apply to all registered persons.
State Registration (Blue-Sky Laws)
- FINRA registration alone is not enough: register in every state where you do business.
- State exams: Series 63, 65, or 66 (state law, not FINRA top-offs).
- States may impose stricter rules, never lesser standards.
Statutory Disqualification and Ineligibility
- Triggers: any felony within 10 years, any securities-related misdemeanor within 10 years, court injunctions, SEC/SRO bar or expulsion, willful violations, false filings.
- Relief comes only through FINRA's Membership Continuance Application (MC-400) process.
- Ineligibility is broader: a firm must deny or terminate a person under a bar, suspension, or a pending indictment for securities offenses. No conviction needed.
Numbers to Lock In
| Item | Value |
|---|---|
| Form U4 update deadline | within 30 days of new reportable facts |
| Fingerprints not received | registration inactive after 30 days |
| U4 disclosure history | 10-year employment / 5-year residential |
| Firm background investigation | at least 3 years |
| Regulatory Element frequency | annually |
| Felony / securities-misdemeanor look-back | 10 years |
Memory Aids
- Registration is like a medical license: study and pass the exam alone (SIE), but you need a firm to sponsor your actual license before you can practice.
- Blue-sky: federal registration is your driver's license; state registration registers your car in each state you drive in. You need both.
Top Gotchas
- The SIE needs no sponsorship, but top-off exams do; both are required to register.
- Fingerprinting is an SEC rule, not FINRA. FINRA runs the registration process.
- Regulatory Element is now annual (changed from every 3 years).
- CE inactive blocks all registered activities, and does not terminate registration.
- The 10-year clock runs from the conviction date, not the offense date; nolo contendere counts like a guilty plea.
- A pending indictment alone triggers ineligibility; no conviction required.
- The firm (and its supervisors, even if merely negligent) is responsible for proper registration.
One-Breath Recap
Registered persons sell and advise; non-registered persons file paperwork. Pass the SIE plus a top-off, file U4 through the firm, register in every state, and complete annual Regulatory and Firm Element CE. Felonies, securities misdemeanors within 10 years, and pending indictments slam the door.
Need more than the recap? This is a condensed summary. If it is not enough, read the full Registration and Continuing Education unit for the complete lesson.