Non-punitive actions
Not all actions taken by the state administrator that affect the registration status of certain persons are punishments. Two registration actions are non-punitive (they don’t discipline the person). You’ll want to know both:
- Withdrawals
- Cancellations
Withdrawals
A withdrawal is a request submitted by a registered person to voluntarily end their registration.
- Broker-dealers and investment advisers typically file withdrawal forms when they shut down the business or stop offering securities-related services.
- Agents and investment adviser representatives (IARs) typically file withdrawal forms when they retire, quit, or are terminated.
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 |
Cancellation
A cancellation happens when the registered person can’t voluntarily submit the appropriate withdrawal form, so the state administrator cancels the registration instead.
The most common reasons include:
- Death
- Mental incapacitation
In these situations, the administrator proactively updates the person’s registration status.
Cancellation can also occur when the administrator can’t contact the registered person. For example, the administrator sends a letter, but it’s returned because the person is no longer at that address. Because a change of address normally requires prompt disclosure, the administrator may cancel the person’s registration until the issue is resolved.
Even after a person’s registration has been withdrawn or canceled, the administrator retains jurisdiction over that person for one year. The Uniform Securities Act (USA) states:
The administrator may institute a revocation or suspension proceeding… within one year after the withdrawal became effective.
This matters because withdrawals and cancellations are non-punitive. If the person later wants to rejoin the industry, a suspension or revocation on their record could make re-registration more difficult and would appear on their permanent public record.