FINRA Revives Broker Bonus Disclosure Plan

FINRA Board to also mull other ‘important considerations for a customer deciding whether to follow the rep to the new firm’

More On Legal & Compliance

from The Advisor's Professional Library
  • Whistleblowers A whistleblower is any individual providing the SEC with original information related to a possible violation of federal securities law.  The Dodd-Frank Act established a whistleblower program that enables the SEC to reward individuals who voluntarily provide such information.
  • The Need for Thorough and Effective Policies and Procedures Whethere an advisor is SEC or state-registered, RIAs must revise their policies and procedures to address significant compliance problems occurring during the year, changes in business arrangements, and regulatory developments.

A revised plan to require that brokers’ recruitment compensation be disclosed when they switch firms will be considered at the Financial Industry Regulatory Authority’s Sept. 19 board meeting.

FINRA CEO Richard Ketchum said in late May that FINRA’s broker bonus disclosure plan would be brought up at the self-regulator’s July 11 board meeting. However, a FINRA spokesperson said in mid-July that “due to scheduling considerations,” the rule had been pushed to a later date.

FINRA said late Wednesday that disclosures related to recruitment practices and account transfers would be one of the four rulemaking items discussed at the meeting.

The board will consider an updated proposal to require disclosure of compensation a registered representative receives in connection with changing firms and other important considerations for a customer deciding whether to follow the representative to the new firm."

Reprints Discuss this story
This is where the comments go.