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FINRA Seeks Comments on Rule Requiring Complaints, Arb Claim Reports

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The Financial Industry Regulatory Authority is seeking feedback on its rule requiring broker-dealers to report to FINRA internal violations, information regarding written customer complaints, and specified criminal actions, civil complaints and arbitration claims.

As part of a retrospective review of its rules, the self-regulator wants comments by March 9 on Rule 4530, which also contains provisions obligating associated persons to promptly report to their member firms the existence of certain reportable events.

In Regulatory Notice 20-02, FINRA explains that it requires member firms to report the specified events, internal conclusions of violations, and customer complaint information electronically via the Firm Gateway.

When reporting the specified events and internal conclusions of violations, member firms must submit a disclosure event report.

In providing feedback on the rule, firms should consider how the original purposes and need for the rule have been affected by regulatory, technological or other environmental changes, FINRA said. FINRA is also asking whether categories of information or documents should be added to or removed from the scope of the rule, or whether some categories should be clarified or modified?

After comments are received, FINRA may modify the rule, update it or provide additional guidance, administrative changes or technology improvements.

— Check out FINRA’s Top 5 Exam Priorities in 2020 on ThinkAdvisor.