Individual Disclosure Explanations

Company and individual users of NMLS must provide Disclosure Explanations for any Disclosure Question with a ‘Yes’ response, and may provide explanations for ‘No’ responses.

Updated: 7/25/2014

An Explanation is intended to provide regulators with additional information necessary for the proper evaluation of a license application. An Explanation can only be used to provide information for a single ‘event’ (e.g. court order, regulatory action, civil settlement). If users have multiple events that require disclosure, they should complete multiple Explanations. The third section of this Reference Guide provides additional guidance for individuals who must disclose multiple events and/or answer multiple disclosure questions with a ‘Yes’ response.

Note: Any Explanation and related material, once attested to and submitted, can be amended or replaced, but the original submission will always remain part of the company or individual’s historical record in NMLS. It cannot be completely removed from the company or individual record in NMLS. Please carefully review any Explanation prior to attestation and submission.
Each Explanation is comprised of the following information:
Brief Description of Explanation
A brief statement describing what event the Explanation relates to (e.g. “Felony”, “Cease and Desist Order”).
Disposition
The current status of the event for which the Explanation is being provided. You can choose from a drop down menu including the following options: Pending, On Appeal, Final, Open, Closed, or Other. If you select ‘Other’, a Disposition Description must be provided.
Event Explanation Detail (4,000 character limit)
Provide a detailed description of the event including the date. This field must be completed in order to submit an Explanation. If you chose to provide a supporting document that contains all relevant details, you will need to upload that document as a PDF (see Supporting File below) and provide some form of an explanation in this field. The explanation provided should be specific to the event you are describing related to the disclosure question. The explanation should provide regulators with enough information regarding the event in order for them to complete their review.

Event Explanation Detail Screen
Applicable Questions
Select the checkbox next to the disclosure question(s) with “Yes” responses related to the Explanation you have provided. A single Explanation can be associated to one or more questions and multiple Explanations can be associated to a single question.

Applicable Questions screen
Supporting File
You may upload any applicable supporting documentation by browsing for the document on your computer. Supporting documentation should include official documents that relate to an event, i.e. court order, disposition, administrative action. Documents that are already uploaded in the Regulatory Action section do not need to be uploaded again and can be referenced in the explanation section, i.e. “See [State] Consent Order dated mm/dd/yy”. These documents must be related to the specific event you are explaining. Do not combine documents related to multiple events into a single Supporting File. Only a single PDF can be uploaded for an event. If you have multiple documents for a single event, you should combine them into a single PDF file. A PDF file is not required by the system in order to submit an Explanation, though your regulator may subsequently require provision of some form of documentation. Examples of documents may include: Criminal or Civil Court Documents, Administrative Orders, and other public documents. Please contact your regulator if you have specific questions regarding what documents should be provided.
Supporting File Upload screen

A separate Explanation should be provided for each event resulting in a ‘Yes’ response to a disclosure question. In addition, a single Explanation can be associated to one or more disclosure questions.

Important: Once you have completed the remainder of the filing or are ready to submit be sure to do so through the Attest and Submit section.

Please contact your state regulator with any questions regarding interpretation of disclosure questions or the content of explanations. Contact the NMLS Call Center at 1-855-NMLS-123 (1-855-665-7123) for assistance with any technical issues related to disclosure explanations that may be preventing submission of your filing.

See the following Examples below regarding how Explanations can be entered in NMLS: