Failure to Disclose Disciplinary Information on a Registration Application
Disciplinary Information questions ask whether certain events have occurred concerning criminal, regulatory, financial and employment matters. Before filing a firm (Form 7-R) or individual (Form 8-R) application, read the instructions and definitions carefully. The failure to answer all questions in the application completely and accurately or the omission of required information may result in the denial or revocation of registration.
The failure to disclose a disciplinary matter either in an application or an update will result in the imposition of a late disclosure fee of $1,000 in accordance with NFA Registration Rule 210(c).
Answering Disciplinary Information Questions Incorrectly or Not Submitting Matter Pages or Disclosure Matter Pages
The failure to correctly answer a disciplinary question or complete a Matter Page (for firms) or a Disclosure Matter Page (for individuals) is called a failure to disclose disciplinary information. A willful failure to disclose disciplinary information on Form 7-R is a disqualification from registration and the firm's registration application can be denied based on either its own failure to disclose, or the failure to disclose by any of its principals who are individuals. A willful failure to disclose disciplinary information on Form 8-R is a disqualification from registration and the individual's registration application can be denied based on the failure to disclose.
Common Types of Failures to Disclose
Some common types of failures to disclose include:
- Criminal matters resulting in dismissal after completion of probation
- Regulatory matters reported to another regulatory or self-regulatory authority
- The individual told the firm about a disclosable matter, but the matter is not disclosed on the Form 8-R
- The individual's registration or license was subject to special conditions
For more information on these common types of failures to disclose visit the Disciplinary Information FAQs.
Advice from NFA Registration Investigations or Legal (RIL) Staff
A question that is answered incorrectly in the application because of advice received from a lawyer, employer, a judge or anyone else (other than NFA's RIL staff) can result in severe consequences, including denial or revocation of registration. If the language of a question in the Disciplinary Information Section requires disclosure of a matter, a Yes answer to the question is required no matter what other advice has been received from anyone other than NFA's RIL staff. Additionally, the applicant or registrant remains responsible for failures to disclose even if someone completes the form on the applicant's or registrant's behalf.
If the advice of NFA's RIL staff is sought, a written record containing the date of the conversation, the name of the NFA staff person giving the advice and a description of the advice should be made during the conversation and kept in the event an issue concerning disclosure of the matter arises later.
Updating an Application
If any information provided by the firm or individual on the application changes or a matter that would have required disclosure on the application occurs after the application is filed, the new information must promptly be filed and disclosed to NFA. Associated persons (AP) and principals should advise their sponsors of the new information, and the sponsor must file the update on their behalf. The failure to promptly update information can result in severe consequences, including the denial or revocation of registration. In addition, the failure to disclose a disciplinary matter either in an application or an update will result in the imposition of a late disclosure fee.