Key Takeaways
- All persons engaged in options activities must be properly registered.
- Registration requirements vary based on the activities performed.
- Supervisors must verify registration status before allowing activities.
- Form U4 is used for initial registration and updates.
- Continuing education requirements must be monitored and enforced.
Last updated: January 2026
Registration Requirements
As a supervisor, you are responsible for ensuring that all personnel engaged in options activities are properly registered and qualified.
Registration Categories
Representative Registrations for Options
| Registration | Qualifies For |
|---|---|
| Series 7 | All options activities (with SIE) |
| Series 6 | No options authority |
| Series 9/10 | Supervise options activities |
| SIE | Prerequisite for Series 7 |
Principal Registrations for Options
| Registration | Qualifies For |
|---|---|
| Series 9/10 | General Securities Sales Supervisor |
| Series 4 | Options Principal (limited) |
| Series 24 | General Securities Principal |
Form U4 Requirements
Initial Registration
| Requirement | Details |
|---|---|
| Form U4 | Must be filed within 30 days of employment |
| Background check | Fingerprinting and criminal history |
| Exam requirements | Pass required qualification exams |
| Disclosure | Criminal, regulatory, and financial history |
Disclosure Requirements
All of the following must be disclosed on Form U4:
| Category | Examples |
|---|---|
| Criminal | Felonies, misdemeanors (except minor traffic) |
| Regulatory | SEC, FINRA, or state actions |
| Civil | Investment-related civil judgments |
| Customer complaints | Written complaints alleging sales violations |
| Terminations | Reasons for termination from prior firms |
| Financial | Bankruptcies, judgments, liens |
Supervisor Duty: Review U4 disclosures carefully. Red flags may indicate heightened supervision is needed.
Verifying Registration Status
Before Allowing Options Activities
| Step | Action |
|---|---|
| Check CRD | Verify current registration status |
| Confirm qualifications | Ensure appropriate exams passed |
| Review disclosures | Note any disciplinary history |
| Document | Maintain records of verification |
Ongoing Monitoring
| Requirement | Frequency |
|---|---|
| Registration status | Monitor for lapses |
| U4 amendments | File within 30 days of changes |
| Disclosure updates | Prompt disclosure of new events |
Continuing Education Requirements
FINRA CE Program Components
| Component | Description |
|---|---|
| Regulatory Element | FINRA-developed training |
| Firm Element | Firm-specific training |
Regulatory Element
| Rule | Requirement |
|---|---|
| Timing | Within 120 days of 2nd registration anniversary, then every 3 years |
| Content | Compliance, regulatory, and ethical standards |
| Consequence | Inactive status if not completed |
Exam Tip: The Regulatory Element must be completed within 120 days of the 2nd registration anniversary and every 3 years thereafter. Failure to complete results in INACTIVE status - the person cannot conduct business until it's completed.
Firm Element
| Rule | Requirement |
|---|---|
| Annual | Must be completed each year |
| Needs analysis | Based on firm's assessment of training needs |
| Options-specific | May include options-specific training |
| Documentation | Maintain records of completion |
Supervisor Responsibilities
Registration Oversight
| Duty | Action |
|---|---|
| New hires | Verify registration before activities begin |
| Transfers | Confirm registration transferred properly |
| CE tracking | Monitor completion of CE requirements |
| Disclosure | Ensure prompt U4 amendments |
Test Your Knowledge
A person who wants to engage in options trading activities must have passed which minimum qualification exam(s)?
A
B
C
D
Test Your Knowledge
The Regulatory Element of continuing education must be completed:
A
B
C
D