For employees who work in the financial service industry, the Uniform Termination Notice for Securities Industry Registration (Form U-5 or U-5) is a critical document, and should be taken very seriously. The Form U-5 is a regulatory form that brokerage firms must file whenever an associated person’s registration and employment with the firm is terminated.
The U-5 outlines dates of employment, positions held, which registrations are being terminated, and, most importantly, the reason for the termination of employment. The form also requires an affirmation from the firm verifying the accuracy and completeness of the information contained in the U-5 prior to filing with the Financial Industry Regulatory Authority (FINRA).1 The accuracy of the U-5 is important because the reported information is used by a number of constituencies for various reasons. For example, firms use the information to help them make informed employment decisions about whom they should hire. Thus, in some respects, the U-5 is an employee’s résumé from the employer’s perspective. In the often-uncomfortable context of employer and employee separation, disputes over the contents of a Form U-5 can quickly arise. Therefore, it is essential that employers and employees work together to ensure accuracy in the filing of a Form U-5. If they don’t, they can easily find themselves entrenched in burdensome and expensive arbitration with little up-side for either party.
