Ready to launch your broker-dealer firm? The first step is your broker-dealer registration and licensing.
In order to conduct securities business and earn per trade commissions in the U.S. (or with U.S. investors) both the broker-dealer firm and the firm’s representatives must be registered with the Financial Industry Regulatory Authority (FINRA).
Once the broker-dealer firm and its registered representatives (RRs) are properly registered, registrations for both must continue to be maintained in good order according to FINRA and state rules.
In this blog, we’ll cover how to go about registering and licensing your broker-dealer and its associated RRs and explain how we can help you achieve and maintain compliance with FINRA standards.
Broker-dealer registration and licensing: What to do to comply with FINRA requirements
Registering and licensing your broker-dealer firm and its registered representatives involves a few key steps.
- Firm broker-dealer registration process is governed by FINRA Rule 100 Series and FINRA Rule 1014. Each applicant must go through a vigorous New Member Application (NMA) process with FINRA, which typically can take up to nine months and requires firms to meet certain membership standards.
- Each person engaged in the securities business of a FINRA-registered broker-dealer must be registered with FINRA as a representative or principal in each registration category. This will be based on their functions and responsibilities as prescribed by FINRA Rule 1120.
- Broker-dealer and RR registrations must be maintained via the Central Registration Depository (CRD) program which must be kept updated according to FINRA rules referred to above. The CRD program covers the registration records of broker-dealer firms, branch offices and their associated individuals, including their qualification, employment and disclosure histories. It also directs the processing of form filings, fingerprint submissions, collection and disbursement of registration-related fees, qualification exams and continuing education sessions.
- In addition to the initial registration requirement for all individuals engaged in the securities business, FINRA Rule 1240 prescribes continuing education requirements to all registered representatives. Continuing education requirements are separated into two categories: Regulatory Elements (administered by FINRA) and Firm Elements (administered by each firm). All broker-dealer firms are responsible for ensuring compliance with both regulatory and firm elements of the continuing education requirements.
Broker-dealer registration and licensing: How the COMPLY™ suite of solutions can help
The COMPLY suite is comprised of National Regulatory Services (NRS®), RIA in a Box®, ComplySci® and illumis® solutions. With access to the breadth of our solutions, broker-dealers and their registered representatives can register and license their firm, maintain compliance and navigate the complexities of the regulatory landscape with ease.
Specifically, COMPLY can help firms with all aspects of broker-dealer and registered representative registration requirements, including:
- New Member Application (NMA) support.
- CRD administration and support, including annual registration renewals.
- Continuing Education support.
Learn more about the consultative, technological and educational support COMPLY provides broker-dealers today!
