Final answer:
In cases where a broker-dealer files a Form U5 for a representative's termination, stating that the individual is deceased does not require further disclosure. Other statuses such as discharged, other, or permitted to resign generally necessitate additional details as per FINRA rules. Therefore option 1) Deceased is the correct answer.
Step-by-step explanation:
When a registered representative leaves a broker-dealer, the firm must file a Form U5 (Uniform Termination Notice for Securities Industry Registration) with the Financial Industry Regulatory Authority (FINRA). This form provides details on the circumstances of termination and is required for regulatory purposes. Understanding which events require further disclosure on the Form U5 helps to comply with industry rules and regulations.
The FINRA rules stipulate that certain types of separations necessitate additional details about the reasons for a representative's departure. Let's examine the options provided:
• Deceased: When a representative passes away, the broker-dealer should indicate this on the Form U5 without the need for additional explanation.
• Discharged: If a representative is fired, the firm is compelled to provide additional details regarding the reasons for discharge to ensure full transparency for regulatory and compliance purposes.
• Other: This category is ambiguous and may cover a range of circumstances, some of which might require further explanation depending on the particular reasons involved.
• Permitted to resign: This typically indicates that the representative was allowed to resign perhaps in lieu of facing potential termination proceedings. Detailed disclosure will likely be needed to elucidate the underlying reasons.
Therefore, the correct answer to the student's question is that being deceased does not require further disclosure beyond the fact itself on Form U5.