Frequently Asked Questions

The Central Registration Depository (commonly referred to as “CRD”) is the central licensing and registration system used by the U.S. securities industry and the its regulators. It is operated by FINRA. CRD contains the registration records of broker-dealers and their registered individuals including their qualifications, employment history and disclosures. Certain information contained in CRD is viewable by the general public through FINRA’s BrokerCheck website.

In most cases, the CRD disclosure will not be immediately removed after obtaining an expungement award. A court of competent jurisdiction must confirm arbitration awards directing expungement before FINRA will expunge customer dispute information or Form U-5 termination language from the CRD system. However, FINRA currently will take action on, without a court order, expungement directives contained in arbitration awards rendered in disputes between registered representatives and firms in which the arbitration panel expressly states in the award that the expungement relief is being granted because of the defamatory nature of the information.

The Protocol is an agreement signed by various broker-dealer firms to allow the broker to take specific client information when leaving a firm. When brokers transition from one firm to another and both firms are signatories to the Protocol, the brokers may take account information that contains the client name, phone number, email address, and account title of the clients that they serviced while at the firm. Advisors are prohibited from taking any other documents or information, including account numbers. Provided that the departing broker and his/her new firm follow the Protocol, neither can have any liability to the broker’s former firm by reason of the broker taking the above-stated information or soliciting clients serviced by the broker at his/her prior firm. To claim protection under the Protocol, departing brokers should provide a written resignation letter to their branch manager and attach a copy of the retained list of information.

Typically, promissory notes require financial advisors to repay the outstanding balance if they leave the firm for any reason at all, whether voluntarily or involuntarily. However, promissory notes may provide for instances where repayment is not required, such as where the termination was due to retirement, disability or a reduction in force. Financial advisors should carefully review the specific terms of their promissory notes.

FINRA typically issues initial Rule 8210 notices in connection with an informal inquiry that does not have to be reported on your Form U-4. Advisors should let their branch manager and compliance department know if they have received the notice and confirm with the compliance department about the need for any required regulatory disclosures.

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