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
  • Trading Practices and Errors When SEC-registered investment advisors conduct annual audits of firm policies and procedures, they should pay close attention to trading practices.  Though usually not required to, state-registered advisors should look at their trading practices and revise policies that do not fully protect clients.
  • Code of Ethics Rule The Code of Ethics Rule, found in Rule 204A-1, uses severe consequences for violation to help ensure investment advisors will do the right thing.  

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.