Becoming a Registered Employee
A registered firm must file registration forms for each of its employees who will become registered. Let’s go over the terms for different types of registered employees again. Registered employees are often referred to as associated persons. FINRA recognizes two broad categories of individuals for registration: representatives and principals. A registered principal is a manager of the member’s investment banking or securities business—including its sole proprietors, officers, and partners. FINRA requires all member firms and all firms applying for membership (other than sole proprietorships) to have at least two registered principals for each aspect of the firm’s investment banking and securities business. A registered representative is any other person who solicits or conducts business in the investment banking or securities business, including research analysts and broker-dealer trainers.
All persons engaged in the broker-dealer securities business are subject by the Exchange Act to personal registration requirements under FINRA rules and must pass the Securities Industry Essentials (SIE) exam and one or more specialized exams. The specialized exams are tailored to specific jobs within the securities industry, and they are also known as “top-off exams.” If an employee changes firms from one broker-dealer to another, he must amend his registration.
All individuals become registered by filing a Form U4 and submitting a fingerprint card, either as par