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FINRA's Revised Broker-Check Rule

By Erwin J. Shustak, Esq. of Shustak Reynolds & Partners, P.C. posted on Monday, June 1, 2015.

FINRA (The Financial Regulatory Authority), which supervises broker-dealers and the more than 650,000 financial advisers, recently proposed a rule that would require brokerage firms to include links on the firm’s web site to the public, Broker-Check records, containing background information on the firm’s financial advisers.

Under the proposal, all brokerage firms would be required to include a link to the FINRA Broker-Check portal (www.finra.org) on the firm’s homepage first viewed by investor’s visiting the firm’s site.  The proposed rule also requires a link to Broker-Check on the profile pages of each adviser.  This rule was first proposed in 2013 but withdrawn after the financial industry raised concerns and objections.  Unlike the original proposed rule, the new rule does not apply to social media sites.  The Broker-Check links only must be added to the firm’s web site.

The proposal follows in the growing interest of FINRA, on behalf of the investing public, to ensure investors know as much as possible about their brokers and have access to prior complaints and arbitrations, employment histories and other, relevant data about the person to whom they entrust their investments.  The proposal will, no doubt, substantially increase the traffic to Broker-Check, the data base that includes the disciplinary and complaint history of all registered representatives.

For more information, contact Shustak Reynolds & Partners, P.C.  Erwin J. Shustak, Esq., Managing Partner, 619.696.9500; [email protected]

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