What Does "Discharged" Mean on a Form U5?

The short answer: "Discharged" is one of five reasons a firm can give on Form U5 when an advisor's registration ends, alongside Voluntary, Permitted to Resign, Deceased and Other. In plain terms, the firm ended the relationship. For Discharged, Permitted to Resign and Other, the firm must add a written explanation. A separate question, 7F, asks whether the advisor resigned, was discharged or was permitted to resign after certain allegations of misconduct, and a yes there becomes a disclosure on BrokerCheck. The next FINRA member firm that registers the advisor must review the U5.

What are the five Form U5 termination reasons?

Section 3 of Form U5, the Uniform Termination Notice for Securities Industry Registration, asks the firm to choose one reason for a full termination. FINRA's instructions list the choices as Voluntary, Deceased, Permitted to Resign, Discharged and Other, and require an explanation when the firm picks Permitted to Resign, Discharged or Other. FINRA's Explanation of Terms defines "resign" for the disclosure questions but does not define the five Section 3 reasons, so the second column below gives their ordinary meaning.

For all five, the Section 3 reason itself stays off BrokerCheck under FINRA Rule 8312. A Voluntary reason can still come with a Question 7F disclosure, covered below, and whatever the reason, other Section 7 answers such as customer complaints, investigations, and criminal or regulatory matters reach BrokerCheck too. Partial terminations, which end some registrations and keep others, carry no reason at all.

What does "Discharged" mean on a Form U5?

Discharged means the firm ended the advisor's association. The label carries no detail on its own, so the explanation does the work. FINRA's Regulatory Notice 10-39 says a firm "must provide sufficient detail" for a reasonable person to understand the circumstances. Its example: writing only that a person violated "firm policy" falls short of that standard. The firm must identify the policy and describe the conduct involved.

What is the difference between Discharged and Permitted to Resign?

With Discharged, the firm ended the relationship. With Permitted to Resign, the advisor resigned with the firm's permission. The two share a lot: both require a written explanation, both are withheld from BrokerCheck as Section 3 reasons, and both are in the U5 that the next FINRA member firm to register the advisor must review.

Neither choice settles the disclosure questions. Notice 10-39 says each question on Form U5 stands on its own, and that reporting a reason in Section 3 does not remove the duty to answer Section 7, including Questions 7B (internal review) and 7F (termination). FINRA's Explanation of Terms defines "resign" to include any termination in which the allegations are a proximate cause of the separation, even if the individual initiated it. A resignation after allegations is reportable under 7F the same way a discharge is.

Does "Discharged" show on BrokerCheck?

Only as the termination type in a Question 7F disclosure: FINRA withholds the Section 3 reason and explanation from BrokerCheck, and releases a 7F disclosure when the firm answers yes.

• Section 3, the reason and its explanation: never released. Rule 8312 says FINRA shall not release "Reason for Termination" information reported on Section 3, or the internal review answer in Section 7.
• Question 7F, the termination disclosure: released. 7F asks whether the person resigned voluntarily, was discharged or was permitted to resign after allegations of violating investment-related statutes, regulations, rules or industry standards of conduct, fraud or the wrongful taking of property, or failure to supervise in connection with those statutes, rules or standards. A yes requires a Termination Disclosure Reporting Page listing the termination type (Discharged, Permitted to Resign or Voluntary Resignation), date, allegations and product type. BrokerCheck shows it as an "Employment Separation After Allegations" disclosure, released three business days after FINRA processes the filing.
• Employment history: the dates of the advisor's time at the firm are shown.
• Other Section 7 disclosures: released the same way, three business days after processing. These cover investigations, criminal and regulatory matters, and customer complaints, arbitrations and civil litigation. Only the internal review answer (7B) is withheld.

At the next firm, Form U4 Question 14J asks the advisor the same question, with an optional comment field, and BrokerCheck releases information from both the most recent U4 and U5. Our guide to how Form U4 and Form U5 work together covers that handoff.

What does a firm write in the termination explanation?

The firm writes a description of the circumstances detailed enough for a reasonable person to understand them, and an authorized signatory verifies "the accuracy and completeness" of the filing. FINRA Rule 1122 prohibits filing registration information that is incomplete or inaccurate so as to be misleading. Notice 10-39 sets the standard for detail described above.

The advisor sees the result promptly. FINRA's By-Laws require the firm to file the U5 no later than 30 days after the termination and to give the advisor a copy as filed at the same time. FINRA's FinPro Gateway also lets financial professionals review and download the latest Form U5 filed on their record, and it emails the personal address on file when an initial or amended full U5 is filed. The advisor's own words enter the record in limited places: a summary of up to 4,000 characters on the Internal Review page when the firm answers yes to Question 7B (part of the internal review disclosure, which BrokerCheck withholds; FINRA notes a departed advisor may not be in a position to submit it), the comment field on the next firm's U4, or a Broker Comment on BrokerCheck for someone who is not currently registered.

Can the termination reason be changed?

The firm can amend it. FINRA's Form U5 instructions say firms should amend the reason or explanation promptly and must explain the basis for the amendment. The By-Laws require an amendment within 30 days of the firm learning that the filing is inaccurate or incomplete, with a copy to the advisor. When FINRA proposed allowing these amendments in 2009, it said the original reason would remain in the CRD system's filing history and that it would notify regulators and the person's current firm of the change.

When the firm will not amend, advisors at times bring claims in FINRA arbitration seeking expungement or damages, and in March 2026 Regulatory Notice 26-06 asked for comment on the standard FINRA applies to expunging termination information. Rule 8312's BrokerCheck dispute process covers only factual inaccuracies in what BrokerCheck displays: FINRA defers to the firm that reported the information, and the process excludes challenges to the allegations behind a termination and information BrokerCheck does not show, such as the Section 3 reason. Whether any of these paths fits a given case is a question for securities employment counsel. Our Form U5 guide for terminated advisors covers arbitration, expungement and state defamation law in more depth.

How do hiring firms read a Discharged U5?

A FINRA member firm that registers the advisor reviews the U5, including the Section 3 reason and explanation the public never sees, because FINRA Rule 3110(e) requires it to. The rule says a member firm must investigate an applicant's good character, business reputation, qualifications and experience before applying to register them. It must review the applicant's most recent Form U5, amendments included, within 60 days of filing the application, or show FINRA it made reasonable efforts to do so, and take "such action as may be deemed appropriate." FINRA notes in Notice 10-39 that firms use Form U5 information to make informed employment decisions.

A FINRA member firm doing that review therefore reads what the public cannot: the Section 3 reason, the explanation, and every Section 7 answer, alongside the advisor's own U4 answers. Each firm applies its own hiring standards to what it reads.

What should you do if your U5 says Discharged?

Advisors in this position generally start with the copy the firm must provide, checking the reason, the explanation and the Section 7 answers against what happened, and noting the termination and filing dates. Two clocks apply: the firm has 30 days from the termination to file and send the copy, and 30 days to amend after it learns of an inaccuracy. Securities employment counsel is the right place for questions about wording, separation agreements, amendment requests or arbitration, ideally before anything is signed. Our guide to what to do in the first 72 hours after a termination puts those steps in order. Our free guide, What Are Your Options After a Termination?, covers the paths forward in more depth. Rapid Response is how Winthrop works with advisors in the weeks after a termination, alongside their counsel. This article is general information; legal advice on any specific U5 comes from your own counsel.

Every situation is different, and the specific answer comes from a confidential conversation about where you can land: the best deal we can win through our relationships and our record of past deals, and how culture, technology, support and service compare at the firms that fit. Request an introduction.