If an agent leaves their current employer for another broker-dealer, what needs to happen?

When an agent leaves their current employer to join another broker-dealer, the correct procedure involves the old employer filing a Form U5. The Form U5 is used to notify the relevant regulatory authorities, such as the Financial Industry Regulatory Authority (FINRA), about the termination of an agent's registration with the previous firm. This form provides official documentation regarding the end of the agent's association with that broker-dealer and is important for maintaining accurate records in the Central Registration Depository (CRD) system.

This process ensures that the regulatory body can track the agent's employment history and maintain up-to-date information on their professional status, which is critical for regulatory compliance and the protection of investors. After the Form U5 is filed, the agent can then proceed to register with their new employer, which ensures that their transition to the new broker-dealer is appropriately documented and compliant with industry regulations.