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May 11, 2017 at 10:00 AM
The Financial Industry Regulatory Authority board has approved the next step in FINRA’s efforts to tighten the screws on high-risk brokers and reduce recidivism.
The proposals, released Thursday, aim to require firms to adopt heightened supervisory measures for brokers while a disqualification request is under review and when advisors are appealing a hearing panel decision. Plus, they would increase FINRA’s disqualification application fee for individuals and impose a new fee on firms to reflect the extra time it takes the regulatory group’s staff to screen these applications.
One proposal would expand sanction guidelines so adjudicators could apply more severe sanctions when an advisor’s disciplinary history includes additional types of past misconduct. Hearing panels also might be given the ability to restrict certain activities of firms and individuals while a disciplinary matter is on appeal.
“These actions will build on FINRA’s extensive existing programs to address high-risk brokers and reflect our commitment to protect investors and promote public confidence in securities firms and markets. We are continuing to develop additional proposals in this area that will be brought to the Board in the coming months,” said FINRA President and CEO Robert W. Cook, in a statement.
The group plans to issue a Regulatory Notice soon that would seek comment on its key proposals, including additional disclosures on the BrokerCheck website to heightened supervision of brokers appealing disciplinary matters.
