New Disclosure Rules: More Regulation For Registered Representatives

Broker-dealers must comply by November 14, 2009, with the changes to the Uniform Application for Securities Industry Registration orTransfer (Form U4) and Uniform Termination Notice for Securities Industry Registration (Form U5) that went into effect on May 18, 2009, as part of the ongoing effort to encourage transparency in the financial services market while balancing the rights of the registered representatives.

These changes create greater reporting requirements for registered representatives and their firms for whom the Forms U4 and U5 are the passport to employment and developing clients. In response to growing concerns about the practice in arbitrations of naming only the broker-dealer and not the registered representative who engaged in the alleged sales practice violation, the U.S. Securities and Exchange Commission (SEC) proposed changes to the reporting requirements of the Form U4 in March 2009. Prior to the rule changes, a registered representative needed