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REGISTRATION WITH FINRA AND SEC (USA)

REGISTRATION WITH FINRA AND SEC (USA)

 

FINRA REGISTRATION ( Broker-Dealer Firm)

To conduct securities transactions and business with the investing public in the United States, both firms and individuals must be registered with FINRA. Firms must apply and meet certain membership standards to become a FINRA-registered broker-dealer. In addition to filing the New Member Application (NMA) Form and applicable registration forms, you will also be required to provide supporting documentation that addresses how you will satisfy the Qualifications and Standards of Admission as well as other applicable statutory and regulatory requirements. FINRA will not begin reviewing your membership application until it is substantially complete, so it is important that you strictly adhere to specific deadlines during the process.

Steps:

    • Step 1: Reserving the Firm’s name
    • Step 2: Complete the New Organization Super Account Administrator (SAA) Form
    • Step 3: Payment of Application fees
    • Step 4: Submit Form BD electronically to FINRA 
    • Step 5: Mail Hard copy of the Form BD
  • Step 6: Submit All Required Forms Via Firm Gateway
  • Step 7: Submit Fingerprints

 

  • Reserving the Firm’s name:
    • Make sure to request and reserve a proposed name for your firm before making any other submissions to FINRA.
    • Under Article IV, Section 2 of the FINRA By-Laws, a prospective or approved member may not use a firm name identical to that of an existing member, or one so similar that it will confuse or mislead others. Furthermore, pursuant to Section 709 of Title 18 of the United States Code, it is a criminal offense for a person or business entity engaged in the brokerage business to use the words “national,” “Federal,” “United States,” “reserve” or “Deposit Insurance” as part of its business or firm name, unless otherwise allowed by law.
    • Accordingly, new member Applicants are required to submit proposed firm names to FINRA’s Regulatory Review and Disclosure Department for review to determine any conflicts with existing member names and compliance with federal law. New names, whether requested by applicants or by existing members that seek a name change, are subject to review as prescribed under the By-Laws.
    • To reserve a name, please complete the Firm Name Reservation Form. Send the completed form by mail, fax or email to:

FINRA
Regulatory Review and Disclosure Department
9509 Key West Avenue
Rockville, MD 20850
Fax: (301) 216-3710
Email: DisclosureReviewOrg@finra.org

 

  • New Organization Super Account Administrator (SAA) Form :
    • The Super Account Administrator (SAA) is responsible for creating and maintaining firm account administrator and user accounts for FINRA applications. Each firm must designate an SAA by completing the New Organization SAA Form
    • Once FINRA processes your firm’s SAA form, your firm’s SAA will receive FINRA Entitlement Program login credentials, the organization ID number, and entitlement to the FINRA systems required to submit filings and electronically fund your firm’s Flex Funding Account.
  • Payment of Application fees :
    • Your firm must pre-fund your firm’s Flex-Funding Account to pay the appropriate Membership Fee before submitting your New Member Application (Form BD) to FINRA.

 

  • Submit Form BD electronically to FINRA :
    • The Form BD (Uniform Application for Broker-Dealer Registration) is used to register a broker-dealer with the SEC, SROs and jurisdictions. Firms can create and submit Form BD Initial and Amendment filings electronically through Web CRD (Central Registration Depository)
    • Access your firm’s Web CRD account to complete and submit the Initial Form BD application. 

 

  • Mail Hard Copy of the Form BD :
    • Once you have submitted Form BD electronically to Web CRD, you must send a signed and notarized copy of the form to:

FINRA
Regulatory Review and Disclosure Department
9509 Key West Avenue
Rockville, MD 20850

 

  • Submit All Required Forms Via Firm Gateway :
    • After your firm submits Form BD electronically to Web CRD, your firm will be able to submit all relevant forms via the Firm Gateway, including the following:
    • Uniform Application for Securities Industry Registration or Transfer (Form U4) for proposed associated persons, including all individuals listed in Schedules A and B on Form BD. 
    • New Member Application form (Form NMA). 
    • Uniform Branch Office Form (Form BR) for each proposed location.
    • Once your firm is granted access to the Firm Gateway, all subsequent required application, examination and registration fees will be paid via your firm’s FINRA Flex-Funding Account. Funds must be deposited into the Flex-Funding Account in advance.

 

  • Submit Fingerprints:
    • Following entitlement to the Firm Gateway and Form NMA, your firm must submit fingerprints of those individuals specified in Rule 17f-2 of the Securities and Exchange Act of 1934. Firms submit fingerprint information to FINRA in two ways: electronically through FINRA’s Electronic Fingerprint Submission (EFS) Program or by using hard copy fingerprint cards.

 

Registration with U.S. Securities and Exchange Commission

All securities offered in the U.S. must be registered with the SEC or must qualify for an exemption from the registration requirements. The registration forms a company files with the SEC provide essential facts, including:

  1. A description of the company’s properties and business;
  2. A description of the security to be offered for sale;
  3. Information about the management of the company; and
  4. Financial statements certified by independent accountants.

All companies, domestic and foreign, are required to file registration statements and other forms electronically. Investors can then access registration and other company filings using EDGAR.

The registration statement consists of two parts:

  •  A prospectus which is provided to potential investors; and
  •  Supplemental information not provided to investors but which is publicly available.

A prospectus contains financial and narrative disclosures about the issuer and the offering being registered. The prospectus is intended to provide disclosure of all relevant material information necessary for an investor to make an investment decision.

While some types of registration statements, such as a Form S-8, become effective upon filing, most do not. The majority are subject to review by the SEC’s Division of Corporation Finance. The filing is reviewed by an SEC attorney and an accountant to ensure that all required disclosures have been made by the issuer. The SEC’s Division of Corporation Finance may examine a company’s registration statement to determine whether it complies with our disclosure requirements. But the SEC does not evaluate the merits of offerings, nor do we determine if the securities offered are “good” investments.

Approximately two weeks after the filing of a registration statement, the SEC delivers its comments to the issuer and/or its legal counsel. The issuer must then submit an amendment to the previously filed document, along with a response letter to the comments, after which the SEC reviews the amended registration statement. The review process continues until the staff is satisfied with the disclosure provided by the issuer. Once satisfied, the SEC will declare the registration statement effective.

The registration statement must be declared effective before any sales by the issuer can be made. Registration statements and prospectuses become public shortly after the company files them with the SEC

Not all offerings of securities must be registered with the SEC. The most common exemptions from the registration requirements include:

  • Private offerings to a limited number of persons or institutions;
  • Offerings of limited size;
  • Intrastate offerings; and
  • Securities of municipal, state, and federal governments.

By exempting many small offerings from the registration process, the SEC seeks to foster capital formation by lowering the cost of offering securities to the public.

 

 

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Law Graduate from Bangalore, India. Currently involved in research of global crypto regulations and compliance.

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