Not all actions taken by the state administrator against the registration status of certain persons are punishments. In particular, there are two non-punitive registration actions to be aware of:
A withdrawal request is submitted by a registered person when they want to voluntarily remove their registration. Broker-dealers and investment advisers utilize withdrawal forms when shutting down their businesses or if they’re no longer offering securities-related services. Agents and investment adviser representatives (IARs) utilize withdrawal forms when they retire, quit or are terminated from their positions.
These are the forms used to withdraw registration:
| Form | Use |
|---|---|
| Form BDW | Broker-dealer withdrawal form |
| Form ADV-W | Investment adviser registration withdrawal form |
| Form U5 | Agent & IAR registration termination form |
When a registered person cannot voluntarily submit the appropriate withdrawal form, the state administrator may cancel their registration. The most likely reasons for cancellation include death and mental incapacitation. In these circumstances, the administrator proactively makes the adjustment to their registration status.
Cancelation also occurs if the administrator cannot get in contact with the registered person. For example, what if the administrator sends a letter to a registered person, but it’s returned because the person is no longer at that address? A change of address normally requires prompt disclosure. If none has been made, the administrator will move to cancel the person’s registration status until they can resolve the issue.
Even after a person’s registration has been withdrawn or canceled, the administrator retains jurisdiction over that person for a period of one year. This is what the Uniform Securities Act (USA) specifically says:
The administrator may institute a revocation or suspension proceeding… within one year after the withdrawal became effective.
You might be wondering why this is important. The person’s registration no longer exists, right? Well, keep in mind withdrawals and cancellations are non-punitive. What if the person wanted to rejoin the industry in the future? With a suspension or revocation on their record, it would be more difficult for them to re-register, plus would be on their permanent public record.
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