The Financial Industry Regulatory Authority is gearing up to move on two measures — qualification exams and its elder fraud rule, the self-regulator’s chief legal officer, Robert Colby, said Tuesday.
Speaking on a panel at FINRA’s annual conference in Washington, Colby said that FINRA is “on the verge” of making changes to broker qualification exams and plans to file soon with the Securities and Exchange Commission its rule to allow brokers to delay disbursement of funds if elder fraud is suspected.
Colby said that FINRA plans to “split” the Series 7 exam into two levels – basic and specialized. The basic course can be taken by “anyone,” he said, “you don’t have to be [a broker] to take it.” The specialized exam track would be taken by someone “who wants to do business” such as a trader or a broker working in “general securities.”
Colby said FINRA also plans to ask the SEC to give license holders more time in maintaining their securities licenses if they leave the U.S. brokerage business.
Under the plan, “if you step out of the line of business or go to an overseas affiliate and the clock starts ticking on your license you can deregister, but you can get a ‘right of coming back’ in order to maintain your license,” he explained.
Colby also noted that FINRA is “now talking with the SEC about the final form” of its proposed rule issued last October that would give broker-dealers the power to place a temporary hold on disbursement of funds or securities from an elderly or mentally/physically handicapped customer’s account if there is a reasonable belief that the person is being financially exploited.
He said FINRA plans to file the rule “soon” with the Commission for approval.
Other talk at the annual conference included the one-year anniversary of FINRA’s Securities Helpline for Seniors. To date, the helpline has fielded more than 4,600 calls, recovering more than $1.3 million in voluntary reimbursements from firms since its launch last April.