The Financial Industry Regulatory Authority is moving ahead with more rules to rein in brokers with a history of misconduct.
FINRA has sent to the Securities and Exchange Commission for approval two separate rule proposals.
One would adopt Rule 4111, which would impose obligations on broker-dealers that have “significantly higher levels of risk-related disclosures than similarly sized peers.”
FINRA would preliminarily identify these broker-dealers “by using numeric, threshold-based criteria and several additional steps that would guard against misidentification.”
The proposed rule “would create a multi-step process for FINRA’s determination of whether a member firm raises investor-protection concerns substantial enough to require that it be subject to additional obligations.”