More on Registration & Exemptions

tamer hamed 12:26:00 AM
More on Registration Requirements
Many people in the industry ask, "If I stop selling for a while, can I just park my license at the firm until I'm ready to use it again?"
Here is how FINRA answers that:
•    • • • • • • • • • • • • •
•    A member shall not maintain a representative registration with    •
•    FINRA for any person (1) who is no longer active in the member's •
investment banking or securities business, (2) who is no longer

 functioning as a representative, or (3) where the sole purpose is to •
•    avoid the examination requirement prescribed in paragraph (c).    •
•    • • • • • • • • • • • • •
So, if the registered representative is out for two years or more, he must take his Series 6 or Series 7 exam again. Item (3) is saying that a member firm had better not pretend the agent is associated just so he can skip the requirement to requalify by exam.
A broker-dealer also could not sponsor someone for the Series 7 exam just so the person could sit for the test and maybe tell the rest of the candidates what to expect. As the rules say:
•    • • • • • • • • • • • • •
•    A member shall not make application for the registration of any •
•    person as representative where there is no intent to employ such
 •
person in the member's investment banking or securities business.
•    • • • • • • • • • • • • •

Exemptions from Registration
Not every employee of a broker-dealer must register. The following have been granted exemptions from the painful process you're undergoing right now:
•    • • • • • • • • • • • • •
•    Persons Exempt from Registration    •
•    (a) The following persons associated with a member are not    •
•    required to be registered with the Association:    •
•    •(1) persons associated with a member whose functions are solely •
•    and exclusively clerical or ministerial•    •
(2) persons associated with a member who are not actively engaged
•    in the investment banking or securities business;    •
•    •(3) persons associated with a member whose functions are related •
•    solely and exclusively to the member's need for nominal corporate • officers or for capital participation; and
•    •
•    (4) persons associated with a member whose functions are related • solely and exclusively to:
•    •
•    (A) effecting transactions on the floor of a national securities    •
exchange and who are registered as floor members with such
•    •
exchange;
•    •
•    (B) transactions in municipal securities;    •
•    (C) transactions in commodities; or    •
•    •(D) transactions in securityfutures, provided that any such person •
•    is registered with a registeredfutures association.    •
•    • • • • • • • • • • • • •
So, if he is just doing filing/temp work, not involved with underwriting or trading securities, just sitting on the board or investing in the firm, or is a member of a futures or stock exchange filling orders for the firm, that individual is not required to register as a registered representative.

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