The Financial Industry Regulatory Authority just released two “watered down” proposals — one that requires firms to have a link on their websites to BrokerCheck and another that would require firms to provide an “educational communication” to former clients when a broker switches firms.
FINRA sent its proposed rule regarding BrokerCheck to the Securities and Exchange Commission for approval, while its Regulatory Notice 15-19 regarding recruitment compensation is out for public comment until July 13.
FINRA’s revised proposal on member websites would amend FINRA Rule 2210 (Communications with the Public) to require each of a member’s websites to include a “readily apparent reference” and hyperlink to BrokerCheck on the initial webpage that the member intends to be viewed by retail investors and any other page that includes a professional profile of one or more registered persons who do business with retail investors.
The proposal would not apply to a member that does not provide products or services to retail investors, or a directory or list of registered persons limited to names and contact information.
What Your Peers Are Reading
Jon Henschen of the broker-dealer recruiting firm Henschen & Associates sees the BrokerCheck linking requirement as just another “unnecessary expense forced on” broker-dealers.
“If regulators were willing to pay for such [website] changes, I don’t think broker-dealers and brokers would really care, but … this is just another case of unnecessary expense forced on others with no concern by regulators,” Henschen said. FINRA, he opined, has “already imposed too many expenses on our industry so that they can showcase their expensive BrokerCheck website that was paid for by the excessive fines they impose on our industry.”
FINRA’s earlier proposal, pulled in April 2013, would have required BrokerCheck links on social media profiles and possibly even websites that aggregated advisor information.