Chapter 1 - Registration of Broker Dealers and the Supervisory System

when are broker dealers exempt from FINRA registration requirements?

• if they only deal in exempt securities

• offer services outside the United States

what does the membership application for FINRA include and what is it called?

called form BD and includes

• copy of registration submission to the SEC

• trial balance and net capital computation

• the members written supervisory procedures

• list of officers, partners, and associated persons

• any other info requested by FINRA District Office

how many days until FINRA district office notifies if their application has been granted?

within 30 days

when would statutory disqualification occur for a broker dealer or person associated with it

• if they’ve been suspended or expelled from any other self regulatory organization, domestic or foreign

• is the subject of an SEC order suspending or revoking registration

• if they are the associated person who caused the suspension or expulsion of a different firm

• willfully filed a false or misleading application or omitted state material facts on the application

• violated federal securities or commodities laws

• failed to supervise or provided aid to someone who violated securities or commodities laws

• has been convicted of any securities or “money” related misdemeanor or felony within the last 10 years

• has been temporarily or permanently enjoined from engaging in the securities business

what is needed for FINRA to permit a disqualified person to request permission to enter or remain in the securities industry and what do they consider? who has to approve this?

an eligibility proceeding is needed and they consider

• nature and gravity of event that led to disqualification

• length of time since event occurred

• any mitigating circumstances

• the disciplinary history of the member firm and associated person

needs to be approved by FINRA and SEC. if denied by FINRA an appeal may be filed with the SEC