Final answer:
The BrokerCheck system, managed by the CRD, maintains the employment history and regulatory records of securities brokers and investment advisers. It is an essential resource for due diligence, allowing investors and employers to verify the integrity and professional background of financial professionals.
Step-by-step explanation:
The Central Registration Depository (CRD) system, which reviews Form U4, operates the BrokerCheck system. BrokerCheck is a publicly available service that maintains the employment history, certifications, and any regulatory actions or violations of individuals registered to sell securities in the United States, commonly referred to as brokers or investment advisers. Whenever a broker or investment adviser registers or seeks employment with a licensed brokerage firm or investment adviser firm, they are required to complete Form U4 (Uniform Application for Securities Industry Registration or Transfer).
BrokerCheck is a crucial tool for investors and employers to verify the professional background and integrity of financial brokers and advisers. It ensures transparency in the financial industry by providing access to a broker's professional background, thereby protecting investors from potential fraud or misconduct. It includes information about past employment, regulatory actions, and any other misdemeanours to keep checks on their professional conduct.