FINRA (the Financial Industry Regulatory Authority) has issued a rule change for background screening requirements that went into effect on July 1, 2015. FINRA Rule 3110(e) is based on similar provisions in NASD Rule 3010(e) and NYSE Rule 345.11. In short, FINRA Rule 3110(e) lays out the specifics of what is required for a background check on U4 applicants. The new rule walks through the investigation and verification requirements for information in the Form U4 (Uniform Application for Securities Industry Registration or Transfer). Significantly, the rule introduces a new requirement to search national public records in order to verify U4 information. Firms subject to regulation by FINRA need to review their investigation policies and practices for U4 applications.
New FINRA Rule on Background Checks
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