Final answer:
Principals need to review a minimum of 10 years of employment history before signing a Form U-4, which is essential for registering an individual with a brokerage firm or exchange.
Step-by-step explanation:
Principals are required to review a minimum of 10 years of employment history before signing a Form U-4. The Form U-4, also known as the Uniform Application for Securities Industry Registration or Transfer,
is a critical document in the securities industry that must be filed with the Financial Industry Regulatory Authority (FINRA) to register an individual with a brokerage firm, exchange, or self-regulatory organization.
It is crucial for principals to thoroughly check employment history among other background details to ensure the accuracy of the information provided on the U-4 since it will be used to assess the individual's eligibility and qualifications for registration. Inaccuracies or omissions can lead to regulatory issues for both the individual and the firm.