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May 31, 2018 at 02:01 PM
The Financial Industry Regulatory Authority’s new public records disclosure review process, which kicks in on July 9, will ease broker-dealers’ and reps’ public records search burden, at least somewhat, the Cosgrove Law Group noted in a Wednesday blog post.
The law firm noted FINRA’s plans to conduct a public records search within 15 calendar days from the date of an applicant’s Form U4 (Uniform Application for Securities Industry Registration or Transfer) and provide broker-dealers any information resulting from such a search if such information is different from what was the applicant reported.
The additional records search — which Cosgrove notes will satisfy the requirement to perform a search of records for judgments, bankruptcies and liens — was billed by FINRA’s May 18 Information Notice as providing added benefit to member firms and registered persons.
FINRA stated in the notice that the change is likely to: “(1) reduce the costs to firms associated with conducting these public records checks, which often involve finding and hiring a vendor; (2) result in more timely reporting of disclosure information to the benefit of regulators, investors and firms; and (3) result in a significant reduction of late disclosure fees related to judgments and liens.”
Cosgrove notes that while the first and second benefits “seem like probable benefits to both the member firms and the registered persons,” benefit No. 3 “appears to be a stretch.”
