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Zorluk: ZorSelf-Regulatory Organizations (SROs) and FINRA

Following the termination of a registered representative's registration with a member broker-dealer via Form U5, FINRA retains disciplinary jurisdiction over the individual for a period of two years from the effective date of termination.

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Cevap

True. FINRA retains disciplinary jurisdiction over a formerly registered representative for two years following the effective date of registration termination via Form U5.
Under FINRA By-Laws (Article V, Section 4), FINRA retains jurisdiction over any associated person whose registration has been revoked or terminated via Form U5 for two years following the effective date of termination. This authority allows FINRA to bring disciplinary actions for pre-termination violations or for failing to respond to FINRA requests during the two-year window.

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1
Identify the regulatory body and context.
The item addresses FINRA's regulatory jurisdiction over associated persons after employment/registration termination via Form U5.
Understanding the precise limits and duration of SRO jurisdiction is critical for regulatory compliance.
2
Analyze FINRA By-Laws regarding post-termination authority.
FINRA By-Laws explicitly state that FINRA retains jurisdiction over an associated person for two years post-termination.
This two-year rule ensures individuals cannot escape discipline for past misconduct by resigning.
3
Evaluate the statement.
The statement correctly describes FINRA's two-year post-termination disciplinary jurisdiction.
Because the rule matches the statement exactly, the statement is true.

Anahtar Kavram

FINRA Post-Termination Jurisdiction (Form U5)
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Konular

Self-Regulatory Organizations (SROs) and FINRA

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