Study guide
1.2 Individual Registration: Forms U4 and U5, Registration Categories, and Exempt Persons
Investment Company and Variable Contracts Products Principal Series 26
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1 Chapter 1: Registration of the Broker-Dealer and Its Associated Persons
1.1 Broker-Dealer Registration, FINRA Membership, and Firm Filings 1.2 Individual Registration: Forms U4 and U5, Registration Categories, and Exempt Persons 1.3 Pre-Hire Screening, Fingerprinting, and Statutory Disqualification 1.4 Heightened Supervision, Interim Plans, and the Taping Rule 1.5 Broker-Dealers, Investment Advisers, Dual Registrants, and Unregistered Entities
2 Chapter 2: Training, Continuing Education, and Product Knowledge
2.1 Continuing Education (Rule 1240), the Maintaining Qualifications Program, and the Annual Compliance Meeting 2.2 The Investment Company Act of 1940: Classifications, Registration, and Fund Governance 2.3 Mutual Fund Pricing, Redemption, Exchanges, Sales Charges, and Share Classes 2.4 Variable Annuities and Variable Life Insurance: Structure, Charges, and Rule 2320 2.5 Closed-End and Interval Funds, UITs, Money Market Funds, 529 Plans, and Investment Risks
3 Chapter 3: Supervisory System, Conduct Standards, Insider Trading, and Discipline
3.1 The Supervisory System, Written Supervisory Procedures, and Standards of Conduct 3.2 Insider Trading, Information Barriers, and Personal Trading Supervision 3.3 FINRA Investigations, Disciplinary Proceedings, Sanctions, and Exemptions
4 Chapter 4: Communications with the Public
4.1 Communications Categories, Principal Approval, Filing, and Recordkeeping (Rule 2210) 4.2 Content Standards, Investment Company Advertising, and Professional Designations 4.3 Variable Contract Communications, Fund Rankings, Bond Fund Volatility Ratings, and Investment Analysis Tools 4.4 Correspondence and Internal Communications, Social Media, Public Appearances, and Telemarketing
5 Chapter 5: Recommendations, Customer Accounts, and Product Sales Supervision
5.1 Regulation Best Interest, Conflicts, and Form CRS 5.2 Know Your Customer, FINRA Suitability, and Institutional Accounts 5.3 New Accounts, Customer Authority, Discretion, and Order Handling 5.4 Mutual Fund Breakpoints, Share Classes, and Switching Supervision 5.5 Deferred Variable Annuities and the Seven-Business-Day Principal Review 5.6 Prospectuses, Summary Prospectuses, SAIs, and Ongoing Disclosures
6 Chapter 6: Compensation, Outside Activities, and Personal Conduct
6.1 Cash Compensation, Distribution Arrangements, and Conflicts 6.2 Gifts, Gratuities, and Business Entertainment (Rule 3220) 6.3 Training Meetings, Sales Contests, and Non-Cash Compensation 6.4 Referral Payments, Bank Networking, and Unregistered Persons 6.5 Outside Business Activities, Private Securities Transactions, and Rule 3290 Transition 6.6 Outside Accounts, Borrowing and Lending, Account Sharing, and Guarantees
7 Chapter 7: Customer Account Operations, Transfers, and Privacy
7.1 Account Records, Trusted Contacts, Confirmations, and Statements 7.2 Cash Accounts, T+1 Settlement, Regulation T, Extensions, and Freeriding 7.3 ACATS Transfers, Transfer-on-Death Accounts, and Account Changes 7.4 Regulation S-P, Incident Response, Service Providers, and Identity Theft
8 Chapter 8: Anti-Money Laundering, Customer Identification, and Sanctions
8.1 AML Program, Independent Testing, Training, and Governance 8.2 Customer Identification, Due Diligence, and Beneficial Ownership 8.3 SARs, CTRs, OFAC, Information Sharing, and AML Red Flags
9 Chapter 9: Supervisory Controls, Business Continuity, and Regulatory Reporting
9.1 Supervisory Controls, Annual Testing, and CEO Certification 9.2 Business Continuity, Systems Resilience, Cybersecurity, and Vendors 9.3 Rule 4530, FOCUS and Annual Reports, and Customer-Asset Events
10 Chapter 10: Office Classifications, Inspections, and Records
10.1 OSJs, Branches, RSLs, and Inspection Cycles 10.2 Inspection Reports, Independent Review, Signage, and Office Files 10.3 Broker-Dealer Books and Records, Electronic Storage, and Correspondence
11 Chapter 11: Complaints, Arbitration, Mediation, and Expungement
11.1 Customer Complaints, Investigation, Retention, and Reporting 11.2 Predispute Agreements, Arbitration Codes, Eligibility, Panels, and Awards 11.3 Mediation and Customer-Dispute Expungement
12 Chapter 12: Financial Responsibility, Membership Changes, and Investor Protection
12.1 Net Capital, Minimum Tiers, Haircuts, and Early Warning 12.2 Customer Protection, Possession or Control, Reserve Formula, and Exemptions 12.3 New-Product Review and Continuing Membership Applications 12.4 SIPC, Fidelity Bonds, Proxy Materials, and Financial Reports
1.2 Individual Registration: Forms U4 and U5, Registration Categories, and Exempt Persons
Key Takeaways Explain This Topic AI
Form U4 amendments are due within 30 days after the firm learns of the facts, but an amendment reporting a statutory disqualification is due within 10 days (FINRA By-Laws Article V, Section 2(c)).
Form U5 must be filed within 30 days after termination and amended within 30 days after the firm learns facts that make it inaccurate or incomplete, with a copy given to the individual each time.
A Series 26 principal must also hold the SIE plus Series 6 or Series 7, and may supervise mutual funds, closed-end funds during the original distribution, variable annuities and variable life insurance.
Representative and principal qualifications lapse two years after registration ends unless the person rejoins a firm or maintains them through the MQP (Rule 1210.08); the SIE lasts four years.
Under Rule 1230, only purely clerical or ministerial staff are exempt from registration, and accepting a customer order is never a clerical or ministerial function.
Last updated: September 2026
Form U4: The Individual Registration Record
Form U4 (Uniform Application for Securities Industry Registration or Transfer) registers an individual with FINRA, other SROs and the states, and becomes the person's permanent CRD record. The hiring firm files it electronically under Rule 1010 after completing the background investigation covered in Section 1.3. Key content includes:
Residential history for the past five years and employment history for the past ten years , accounting for all time.
Disclosure questions (Question 14) covering criminal charges and convictions, regulatory and civil actions, customer complaints and arbitrations, terminations, and financial events such as bankruptcies or compromises with creditors within the past ten years and unsatisfied judgments or liens of any amount.
Customer-complaint reporting thresholds. A written sales practice complaint is reportable if it alleges compensatory damages of $5,000 or more . A settled complaint, arbitration or civil action is reportable if it settled for $15,000 or more .
Amendment deadlines. FINRA By-Laws Article V, Section 2(c) requires U4 amendments not later than 30 days after the firm learns of the facts, and not later than 10 days after a statutory disqualification occurs. Late disclosure filings incur CRD late fees, and willful omissions can themselves create a statutory disqualification.
Arbitration disclosure (Rule 2263). Form U4 contains a predispute arbitration clause covering employment disputes. Rule 2263 requires the firm to give the applicant FINRA's prescribed written disclosure statement about that clause when asking the person to sign or acknowledge the form. Statutory employment discrimination claims, including sexual harassment claims, are not required to be arbitrated under FINRA's Industry Code unless the parties agree.
Form U5: Termination
When an individual's association ends, By-Laws Article V, Section 3 requires the firm to file Form U5 within 30 days after termination and give the individual a copy at the same time. If the firm later learns facts that make the U5 inaccurate or incomplete, it must file an amended U5 within 30 days after learning of them and again provide a copy. FINRA reminds firms that a U5 reporting an internal review must later be amended to report its conclusion and findings.
A full U5 ends every registration the person holds through the firm and requires the reason for termination and the disclosure questions.
A partial U5 ends only selected registrations or jurisdictions.
Termination reasons are Discharged, Permitted to Resign, Voluntary, Deceased and Other . The first two and "Other" require an explanation, which must be accurate and not misleading.
Terminated individuals must report residential address changes to FINRA for two years , because they remain subject to FINRA jurisdiction for that period (Section 3.3).
The Series 26 Registration Category
FINRA Rule 1220(a)(11) creates the Investment Company and Variable Contracts Products Principal category for principals whose activities are limited to the products a Series 6 representative may sell under Rule 1220(b)(7). Before or at registration, the person must be registered as a General Securities Representative (SIE + Series 7) or an Investment Company and Variable Contracts Products Representative (SIE + Series 6) and pass the Series 26. FINRA's permitted-activities guidance lists the covered products as mutual funds, closed-end funds during the initial offering only, variable annuities and variable life insurance , together with overall supervision of the firm's business in those areas.
A Series 26 principal does not qualify to supervise individual equities, corporate or municipal bonds, options or secondary-market closed-end fund trades. Municipal fund securities such as 529 plans fall under MSRB Rule G-3. Supervising them requires the MSRB's Municipal Fund Securities Limited Principal (Series 51) or Municipal Securities Principal (Series 53) qualification, even though a Series 6 representative may sell them.
Persons Exempt from Registration (Rule 1230)
Only these associated persons are exempt:
people whose functions are solely and exclusively clerical or ministerial ; and
people whose functions relate solely to exchange-floor transactions (when registered with the exchange), municipal securities, commodities, or security futures (when registered with a futures association).
Rule 1230.01 states that accepting customer orders is not clerical or ministerial . An unregistered assistant may occasionally transcribe order details when no registered person is available, but only if a registered person contacts the customer to confirm the details before the order is entered.
- Unregistered staff may Unregistered staff may not
- Schedule appointments and route calls Accept or enter customer orders
- Send prospectuses and blank account forms on request Recommend products or discuss suitability
- Quote a fund's published NAV without comment Solicit new accounts or pre-qualify prospects
- Process paperwork under supervision Receive transaction-based compensation (Rule 2040)
- Lapse of Qualification and BrokerCheck
Under Rule 1210.08 , a person whose representative or principal registration has been terminated for two years or more must requalify by examination. The exceptions are maintaining the qualification through the Maintaining Qualifications Program (MQP) under Rule 1240(c), described in Section 2.1, or another FINRA-permitted route. The SIE remains valid for four years . Rule 1210.10 tolls these periods during qualifying active military service.
Rule 8312 governs BrokerCheck , which publishes current and former registered persons' CRD information, including disclosure events, to the public. Section 4.2 explains that member websites must link to BrokerCheck.
Registration Lifecycle at a Glance
- Event Filing Deadline
- Hire Form U4 after background investigation Before the person performs registered functions
- Change in U4 information U4 amendment Within 30 days; within 10 days for a statutory disqualification
- Departure Full or partial Form U5, copy to individual Within 30 days of termination
- New facts after departure Amended U5, copy to individual Within 30 days of learning the facts
Out of the industry Requalify by exam unless the MQP or another exception applies After 2 years (representative or principal); 4 years (SIE)