Accurate Completion of Form U-4 (Uniform Application for Securities Industry Registration)
IMPORTANT
TO: All NASD Members and Other Interested Persons
ATTN: Compliance and Sales Management Personnel
The NASD has noted that an increasing number of applications for registration have been found to be inaccurate or incomplete when compared with the applicant's disciplinary history contained in the Central Registration Depository (CRD) data base. Examples of inaccurate filings include failure to disclose past arrests, convictions, administrative orders, major complaints or legal proceedings when responding to questions 22A through 22J and 22M on Form U-4 (see the attached).
Accurate and complete Form U-4 filings remain a critical aspect of the CRD System. NASD policy requires that any individual failing to disclose a past disciplinary history on Form U-4 must file an amended form disclosing the information with a written statement prepared by the applicant explaining the reason for the initial inaccurate filing. Registration with the member will not become effective until an amended Form U-4 and a statement of explanation are received by the NASD.
Effective immediately, incidents of substantive non-disclosure will be subject to review by the appropriate District Business Conduct Committee (DBCC). The DBCC, upon review of all available information, including the applicant's written explanation, will take whatever action it deems appropriate. This could include formal disciplinary proceedings and sanctions imposed upon individual applicants. Because the failure to disclose such material information could raise a question on the adequacy of the review process conducted by members, DBCCs will consider members' activities as well since members are obligated to verify the statements contained in the application and make inquiry into the past record and business repute of the applicant.
The NASD encourages members to inform all applicants for registration of their responsibilities when answering questions 22A through 22J and 22M on Form U-4. All members should take appropriate steps to ensure that each applicant reads and follows the general instructions for preparing and filing Form U-4.
Questions concerning completion of Form U-4 may be directed to H. Craig Thompson, Assistant Director, Special Registration Review, at (202) 728-8362. Questions regarding any DBCC matters may be directed to your local District Office.
Sincerely,
Frank J. Wilson
Executive Vice President
Legal and Compliance
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