7.3. Requirements and Conditions of Individual Registration

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 one or more qualifying exams. The SEC specifically bars broker-dealers from allowing any individual who is not properly registered from performing the duties of a registered employee. For eligible employees, registration is specific to a member firm, meaning that a change of employer to another broker-dealer requires an individual to amend his registration.

FINRA recognizes two broad categories of individuals for registration: representatives and principals. A principal is a person actively engaged in the management of the member’s investment banking or securities business, including sole proprietors, officers, partners, and managers. A representative is any other person who solicits or conducts bu