U4 and U5 Requirements for Residency, Employment, and

School: University of California, Irvine - Course: HSIEHCRAME 2006 - Subject: Accounting

Chapter 12 U4 Requirement: • 5 year of residency and 10 year of employment history U5 Frequency: the U5 form must be filed with the Central Registration Depository by the former employer within30 days. Requirement: • the new firm must obtain a copy of the form U5 filled out by the old firm,new firm obtain a copy of the form the new employee and SEC • deceaseddoes not require further disclosure on U5 Figure prints Requirement: • the filling of a fingerprint card with the U.S. attorney general, to ensureany criminal past that might result in statutory disqualification from association with a member firm is discovered. • required forall those physically handling cashor securities •need not be kept for employees deemed to be performingclerical functions only • required for all associated persons involved in the sales • firms applying for FINRA membership mustpay dues, assessmentsandagree to be in compliance with all federal securities laws •a firm have to make an amendment if information would cause statutory disqualification within 10 days • does not need to be submitted to SEC Customer complaints: Updates:must be filed with FINRA within15 days of the end of each calendar quarter Private securities transaction, selling away. (sale of securities outside the scope of the regular business of the associated person) Including: •helps an old school friend issue securitiesfor a small business under formation •helps an acquaintance sell some inherited stock certificateswithout the acquaintance becoming a customer of the firm • any sale of securities outside an associated person's or the employing member firm's regular business is a private securities transaction. Regulatory element of continuing education

Frequency: • every year (annually) • If a registered representative has just observed her second anniversary in the industry and did the required regulatory element CE, the next time required her for regulatory elementis next year • CE requirement needed by registered representative: blue sky requirement and firm element training Work for an entity other than member firm: the personmust provide prior written noticeto the member, but the employingmember's permission is not being required. Computer-based training: Frequency:annually, the regulatory element of training requires that all registered persons complete a computer-based training session by December 31 every year. Compensation: Should a registered representative enter into a private securities transaction that would entail earning compensation, the employing member will have theopportunity to approve or disapprove of the associated person's participation. Noncash compensation: Requirement: Noncash compensation exceeding the $100 annual limit to another member firm's employee ispermitted if occasional Gift and gratuities Requirement: • if under $100, the giftsare permittedif no condition of sales or reciprocal business is expected andif the registered representative's employing firm's prior approval has been given. Commissions: After terminated: • after a registered representative's terminating,continuing commissions are permitted,but there is no requirement (not eligible) that they be offered. The termsmust be spelled out in a contract entered into before termination.