Form U-4 Frequently Asked Questions

Welcome to the first part of our new mini-series: Frequently Asked Questions. In this segment we hope to address some common questions and concerns that arise during the process of filing a representative’s Form U4.

1. What is a CRD number?
   A CRD number is a number assigned by FINRA to identify your firm (Firm CRD Number) and each representative (Individual CRD Number). If a representative has ever been registered with a broker–dealer, s/he has been assigned a CRD number. Back office personnel who have been fingerprinted by a member firm also have their own CRD number.
   
   
2. What is an independent contractor?
   The term independent contractor refers to the relationship between the broker-dealer and the salesperson. For example, employees are entitled to workmen’s compensation, unemployment, and disability benefits, while independent contractors are not. The broker-dealer is required to withhold income tax and pay Social Security taxes for an employee, but not for an independent contractor. In most instances, an independent contractor will be required to pay for his or her own expenses, while an employee may not. Although the definition of an independent contractor encompasses a variety of elements, the individual in all cases is considered an associated person of the member firm.
   
   
3. Where can I get fingerprinted?
   Fingerprints can be taken at most police departments. In larger metropolitan areas, individuals may be referred to an agency to have their fingerprints taken. We recommend having two or three sets taken at a time so additional sets are available in the event the FBI deems one or more sets illegible. If all three sets submitted to FINRA are deemed illegible, FINRA will perform an internal investigation in order to review the identity of the individual.
   
   
4. How long will my exam window be open?
   Exam windows remain open for 120 days following submission of the Form U4/Form U4 Amendment requesting the examination.
   
   
5. If my rep fails a Series exam, how long must s/he wait before re-testing?
   If your rep fails an exam once or twice, the required waiting period before the rep may take it again is 30 days. The waiting period is increased to six months after the third failed attempt and for each attempt thereafter. 
   
   
6. How many years of employment history are required on the Form U4?
   The Form U4 requires employment history for the past 10 years. Reps must account for full-time and part-time employment, self-employment, military service, homemaking, unemployment, full-time education, extended travel, and other similar statuses. Gaps longer than three months are not permitted on the Form U4.
   
   
7. How many years of residential history are required on the Form U4?
   The Form U4 requires residential history for the past five years.
   
   
8. If my rep was arrested and charged with a felony back when s/he was in college, but the charge has since been dismissed, does s/he need to disclose this on the U4?
   The disclosure questions on Form U4 are asked two different ways: “Have [you] ever…?” and “In the past [ten years], have [you]…?” The questions pertaining to criminal history ask, “Have [you] ever…?” Although the felony may have been charged years ago, it is required to be disclosed on the U4 upon registration. If the rep was initially charged with a felony that was later lessened to a misdemeanor, or dismissed, the felony charge still needs to be disclosed. Likewise, if the rep was initially charged with a misdemeanor that was later upgraded to a felony, the charge needs to be disclosed.

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