SEC Form BD: What It Is and how It Works

James Chen, CMT is an expert trader, investment adviser, and global market strategist.

Chip Stapleton is a Series 7 and Series 66 license holder, CFA Level 1 exam holder, and currently holds a Life, Accident, and Health License in Indiana. He has 8 years experience in finance, from financial planning and wealth management to corporate finance and FP&A.

What Is SEC Form BD?

SEC Form BD is the form that needs to be completed and submitted to the U.S. Securities and Exchange Commission (SEC) in order to apply for registration as a broker-dealer in the United States. The form must also be updated via amendments any time that there are changes to the information on file.

Key Takeaways

• Any prospective broker-dealer must file SEC Form BD with the Securities and Exchange Commission (SEC) to register as a broker-dealer.
• SEC Form BD is known as the Uniform Application for Broker-Dealer Registration.
• Various information in the form needs to be included, such as management policies, names of executives, past securities violations, account holdings, and any legal proceedings.
• Broker-dealers must file SEC Form BD when registering with the SEC, self-regulatory organizations (SROs), and any jurisdiction.
• SEC Form BD is filed through the Financial Industry Regulatory Authority's (FINRA's) Central Registration Depository (CRD) system.
• Form BD is one of six different Uniform Registration Forms; the others being Form U4, Form U5, Form BDW, Form BR, and Form U6.

Understanding SEC Form BD

Boker-dealers are in the business of buying and selling financial securities for their own accounts as well as for customers. Before being able to transact in any financial aspect, broker-dealers must register with the appropriate authorities and file the correct paperwork.

SEC Form BD (the "Uniform Application for Broker-Dealer Registration") requires that the applying company disclose background information, including management policies that direct the firm, the names of executives and general partners, successor information, and any current legal proceedings or previous securities violations. The provisions that require all securities brokers to be registered with the SEC are covered under Section 15 of the Securities Exchange Act of 1934.

SEC Form BD is used by broker-dealers to register with the SEC, Self-Regulatory Organizations (SRO), and any jurisdiction. Broker-Dealers must file Form BD through the Central Registration Depository (CRD) system, operated by the Financial Industry Regulatory Authority (FINRA).

Filing SEC Form BD

Form BD is one of six different Uniform Registration Forms that are used to file information electronically with FINRA’s Web CRD. When the applicant is filing with the CRD for the first time, a full paper Form BD is required. In addition, some jurisdictions may require a separate paper filing of Form BD. The applicant should contact the appropriate jurisdiction(s) for specific filing requirements.

The other Uniform Registration Forms are as follows:

• Form U4: This form is used by representatives of broker-dealers and investment advisers for registration.
• Form U5: This form is used by broker-dealers and investment advisers to end a representative's registration.
• Form BDW: This form is used by broker-dealers that wish to terminate their registration as a broker-dealer.
• Form BR: This form is used to register or close branch offices of broker-dealers.
• Form U6: This form is used to report disciplinary action against broker-dealers.

Web CRD is the central licensing and registration system used by the U.S. securities industry and its regulators. The CRD contains the registration records of broker-dealer firms and their associated individuals including their qualifications, employment, and disclosure histories. It also facilitates the processing of form filings, fingerprint submissions, qualification exams, and continuing education sessions. Web CRD is a secure system that only firms and regulators that have been granted access by FINRA can use.

Whenever a broker-dealer has any information on a previously filed form that changes, then they have to file a new Form BD indicating these changes.

Required Information in SEC Form BD

Information that needs to be answered in the form includes the type of organization filing (corporation, partnership, limited liability company (LLC), etc.), the month the fiscal year ends, any arrangements with other individuals or entities related to recordkeeping, the type of registration (such as if the broker-dealer will only trade government securities), or the holding of accounts or funds.

The applying entity must also check off all of the types of business it intends to do and the types of financial securities it plans on doing business in. These are just a few of the areas SEC Form BD touches upon. It is in general a comprehensive form covering a significant amount of detail.