Who Must be Fingerprinted at a FINRA Broker-Dealer?

The question of who must be fingerprinted at a FINRA dealer is one that often comes up in questions from clients.  The answer can be found in SEC Rule 17f-2 – Fingerprinting of Securities Personnel.  The rule specifies who must be fingerprinted at a broker-dealer (and in other areas, like transfer agents).

mitch atkins finraThe rule specifies that everyone must be fingerprinted absent an applicable exception.  Specifically, “each of its partners, directors, officers and employees… shall submit, or cause to be submitted, the fingerprints of such persons to the Attorney General of the United States or its designee for identification and appropriate processing.”

However, section (a)(1) provides certain exemptions.  Specifically, for broker-dealers, one need not be fingerprinted if one is:  a) not engaged in the sale of securities, b) doesn’t have regular access to the keeping, handling or processing of securities, monies, or original books and records relating to securities or monies of the broker-dealer, or c) does not have direct supervisory responsibility over someone who does either of the above.  The key that usually impacts broker-dealers is the italicized phrase  above.  Those who have access to checks, general ledgers, and other original books and records must be fingerprinted.  Bookkeepers and others fall into this category.  Anyone who has regular access to firm systems, including the general ledger/accounting system must be fingerprinted.

Many firms require all employees and associated persons to be fingerprinted as a matter of practice.  Just to be on the safe side.  The cost is low and the consequences for failure are high.   Firms can submit fingerprints without registering an individual by completing Form NRF (Non-Registered Fingerprint) in the FINRA Gateway under “Forms & Filings.”

For more information, or help with your FINRA broker-dealer consulting issue, please contact Mitch Atkins at FirstMark Regulatory Solutions.  561-948-6511.

 

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