Complaint Resolution Flashcards
(41 cards)
What is required for registration as an associated person of a FINRA member firm?
Filing of Form U4
Form U4 includes extensive personal and professional information.
What personal information is included on Form U4?
Name, address, aliases, five-year residency history, 10-year employment history, felony or securities-related misdemeanor disclosure
Includes verification of the past three years of employment.
What must be done if there is a yes answer to felony or misdemeanor disclosure on Form U4?
Provide a detailed explanation on a disclosure reporting page (DRP)
This is required for transparency in the registration process.
How long does a member have to file an amended Form U4 after becoming aware of changes?
30 days
This applies to any changes in the information provided.
What must a member firm certify before submitting an application to register an individual with FINRA?
That it has investigated the person’s business reputation, character, education, qualifications, and experience
Ensures the candidate’s credentials are legitimate.
What can happen if misleading information is found in Form U4 during FINRA’s review?
Disciplinary action may be taken, resulting in a bar to the individual
The principal signing the application may also be liable.
Is it necessary to update Form U4 for educational achievements?
No
Changes to marital status also do not require updates.
What are the six categories of disclosures in Disclosure Reporting Pages (DRPs)?
- Criminal disclosure
- Regulatory action disclosure
- Civil judicial disclosure
- Customer complaints/arbitration/civil litigation disclosure
- Termination disclosure
- Financial disclosure
Each category addresses different aspects of an individual’s history.
What can failure to make financial disclosures on Form U4 lead to?
Serious disciplinary action including a permanent bar from the industry
Financial disclosures include bankruptcy and unsatisfied judgments.
Which types of historical information are required on Form U4?
I and IV
Form U4 requires a five-year residency history and a 10-year employment history.
What is the FINRA definition of a customer complaint?
Any grievance by a customer or authorized person involving the activities of the member or associated person in connection with transactions or disposition of securities or funds.
How long must member firms preserve written customer complaint records according to FINRA Rule 4513?
At least four years.
True or False: A complaint must be in writing to be considered a customer complaint.
True.
What should a registered representative do upon receiving a customer complaint?
Immediately bring it to the attention of the designated person in the member’s written procedures manual.
What are the common next steps if a complaint cannot be resolved informally?
Mediation or arbitration.
Under FINRA Rule 4513, how long must a FINRA member firm keep a record of written customer complaints?
Four years.
Define arbitration in the context of dispute resolution.
A private process where disputing parties agree to allow individuals to make decisions about the dispute after receiving evidence and hearing arguments.
What types of disputes does the FINRA Code of Arbitration Procedure cover?
Controversies involving members against other members, associated persons, and customer complaints.
What is required before a customer can open an account with a predispute arbitration clause?
The customer must sign the arbitration agreement.
True or False: Class action claims are subject to arbitration.
False.
What is the time frame for a member firm to provide a copy of the signed predispute arbitration agreement upon request?
Within 10 business days.
What is the initial step to initiate arbitration proceedings?
Filing a claim with the director of arbitration of FINRA.
What must be included in the statement of claim for arbitration?
Description of the controversy, supporting documentation, and the remedy being sought.
