Employee Conduct: Forms U4 and U5
About This Lesson
Form U4 and Form U5 are the two records that follow a registered person through their career. The SIE tests what gets reported, when, and the consequences of getting it wrong.
What you'll cover
- Form U4: the registration form, and the criminal, financial, and other events it must disclose
- The two update windows: 10 business days for criminal matters, 30 calendar days for everything else
- Form U5: the termination form, filed within 30 days
- Statutory disqualification, and which crimes trigger it
- BrokerCheck, the public-facing version of these records
Those reporting timeframes, especially the 10-business-day criminal window and the 30-day rule for the U5 and other changes, are among the most-tested specifics on the SIE. Lock them in.
The U4 and U5 Forms
Two forms track a registered person's career, and the SIE leans on knowing which is which.
Form U4, the registration form
The U4 is filed by the firm when an individual registers with it. It captures personal information, employment history, and disciplinary, criminal, and financial history. Once filed, the rep must keep it current, and providing false or incomplete information on it is itself a serious violation.
Form U5, the termination form
The U5 is filed by the firm when a registered person leaves, within 30 calendar days of termination, and it states the reason for leaving. We cover its details shortly.
One related duty: a firm must keep records of written customer complaints, and complaints alleging theft, fraud, or market manipulation trigger reporting obligations to FINRA.
When a registered person leaves a firm, the firm files Form U5 within 30 calendar days. A few details the SIE likes:
- The reason for termination must be stated, voluntary, discharged, permitted to resign, deceased, or other.
- The departing rep can view their U5 and add a comment if they disagree with the firm's stated reason.
- The U5 becomes part of the public BrokerCheck record, so a negative U5 can follow a rep to their next firm.
- Filing the U5 late exposes the firm to FINRA sanctions.
U4 = the individual's registration form. The firm files it on behalf of the rep when they join. The rep must keep it current, material changes within 10 business days (criminal) or 30 calendar days (everything else).
U5 = the termination form. Filed by the firm within 30 calendar days of the rep's departure. The rep can view it and add a rebuttal comment if they disagree with the stated reason for termination.
Both forms feed into BrokerCheck, which is public. A negative U5 can follow a rep to their next firm and affect future employment in the industry.
A registered representative leaves a firm voluntarily. The firm must file Form U5 within:
U4 Disclosures and Timeframes
The U4 asks for a broad set of personal, legal, and financial disclosures, and FINRA sorts them into categories. The exam mostly cares about what counts as reportable.
Criminal
- Any felony charge or conviction, whether or not it involves securities.
- Securities-related or financial misdemeanors: fraud, bribery, forgery, perjury, money laundering, wrongful taking of property.
- Non-financial misdemeanors (a simple DUI, simple assault) generally do not require U4 disclosure unless they involve dishonesty.
Financial
- Unsatisfied liens or judgments, bankruptcies, IRS tax liens, and compromises with creditors.
- Bond denials or revocations.
Regulatory, complaint, and termination
- SEC, SRO, or state regulatory actions, and statutory disqualification events.
- Written customer complaints alleging sales-practice violations of $5,000 or more, plus related arbitrations, lawsuits, or settlements.
- Involuntary terminations, or leaving while under investigation.
A material change to the U4 must be reported, and the deadline depends on the type of event:
• 10 business days, for criminal matters: charges, convictions, and pleas (including guilty and nolo contendere).
• 30 calendar days, for everything else: financial disclosures (bankruptcies, liens, judgments), customer complaints, regulatory actions, civil litigation, and changes of address or name.
The reason for the split is the stakes: criminal events get the faster window because they may trigger a statutory disqualification review. Financial and civil matters use the standard 30-day window.
- Form U4 requires disclosure of ALL criminal convictions (felonies and misdemeanors), with no time limit. Only minor traffic violations are exempt.
- Civil lawsuits of $5,000+ must be disclosed, pending and settled, securities-related or not.
- Bankruptcies within 10 years must be reported, regardless of the amount.
- Omitting information is its own violation: often punished more severely than the underlying event. Update within 30 days of any material change.
A material change to the information on a registered person's Form U4 must be updated within:
A registered representative is convicted of a felony. How quickly must Form U4 be updated?
A registered representative files for personal bankruptcy. How must Form U4 be updated?
Statutory Disqualification and BrokerCheck
The flip side of disclosure is statutory disqualification, the events that can bar a person from the industry. The exam draws a clean line.
Disqualifying (a 10-year lookback)
- Any felony conviction within the past 10 years, even one unrelated to securities, a felony DUI, felony assault, or drug trafficking all count.
- Securities or financial misdemeanors within the past 10 years: fraud, bribery, forgery, theft, wrongful taking, perjury, or securities-law violations.
Not disqualifying (though still possibly disclosable)
- Non-financial misdemeanors, a misdemeanor DUI, simple trespass, disorderly conduct.
- Arrests that never led to a conviction.
The clean test: a felony DUI is reportable and potentially disqualifying because it is a felony; a misdemeanor DUI is neither disqualifying nor, on its own, reportable; and securities fraud at any level is always disqualifying.
BrokerCheck is FINRA's free public tool for researching the background of any registered broker or firm. It surfaces:
- Employment history and current registrations.
- Disclosed criminal matters, regulatory actions, and civil judicial actions.
- Customer complaints and arbitration awards.
- Bankruptcies and other financial disclosures.
Because it is public, both the U4 and U5 disclosures end up here. Firms must also provide the BrokerCheck hotline (1-800-289-9999) on customer statements and correspondence.
Which of the following would result in statutory disqualification from the securities industry?
Chapter Essentials
Two forms track a career, and the firm files both. The U4 is the registration form, filed when a rep joins and kept current thereafter; the U5 is the termination form, filed within 30 calendar days of departure with the reason stated (the rep may add a rebuttal comment). The single most-tested point is the U4's two update windows: 10 business days for criminal matters (charges, convictions, pleas), and 30 calendar days for everything else, financial disclosures, customer complaints, regulatory actions, and address or name changes. The faster criminal window exists because those events may trigger statutory disqualification.
On statutory disqualification, the line is clean: any felony within 10 years (securities-related or not) and certain financial misdemeanors disqualify, while non-financial misdemeanors (a misdemeanor DUI, disorderly conduct) do not, though they may still need disclosing. A felony DUI is disqualifying because it is a felony; a misdemeanor DUI is not. All of this feeds BrokerCheck, FINRA's public record, and providing false information on the U4 can lead to suspension or a bar.
Every critical number, timeframe, and threshold on the SIE, in one searchable page.
Prometric check-in, what to bring, timing, breaks, and how to stay calm.
The reliable gotchas in this chapter:
• Two U4 windows, not one. Criminal matters are 10 business days; everything else is 30 calendar days. A question that buries a criminal event among financial ones is testing whether you reach for the faster window.
• The firm files both forms. The U4 and the U5 are filed by the firm, not the individual, even though the U4 is the rep's own registration record.
• Any felony is reportable and may disqualify. A felony DUI counts even though it is not securities-related, report it within 10 business days, and expect a statutory-disqualification review. A misdemeanor DUI is neither disqualifying nor, by itself, reportable.
• Bankruptcy is a 30-day financial disclosure, not a disqualifier. It must be reported on the U4, but it does not bar the person from the industry.
• The U5 is 30 calendar days, voluntary or not. The window is the same whether the rep quit or was discharged, and a late filing exposes the firm to sanctions.
• The cover-up beats the crime. FINRA often bars reps for failing to disclose rather than for the underlying event, false or omitted U4 information is its own violation.
Test yourself with exam-style questions on this topic.