The Financial Industry Regulatory Authority Inc., also known as FINRA, is proposing a new rule that would allow investors to access information about a financial advisor’s business and disciplinary history directly from the firm’s web page.
FINRA filed a regulatory notice in the Jan. 25 edition of the Federal Register. FINRA said the rule would require its broker-dealer members to include “a prominent description of and link to BrokerCheck on their websites, social-media pages and any comparable Internet presence.”
BrokerCheck contains information on brokers, including professional background, the type of practice they run and whether they have been disciplined by FINRA or other regulators. Under the new proposal, a broker or firm’s website would have a direct link to the broker’s or firm’s specific BrokerCheck page. Investors would be able to click and go right to those pages.
“FINRA believes that the proposed rule change would increase investor awareness and use of BrokerCheck, thereby helping investors make informed choices about the individuals and firms with which they conduct business,” the Federal Register notice stated.
This proposal responds to a January, 2011 study by the Securities and Exchange Commission (SEC), mandated by the Dodd-Frank financial reform law, that examined ways to increase investor access to BrokerCheck.
This proposal follows a recent FINRA proposal to make brokers disclose their compensation incentives when they move from one firm to another. This comes at a time when there is much confusion about how investment advisors and brokers can use websites, blogs and social media.
Securities Lawyer, Lars K. Soreide, of Soreide Law Group, who represents clients nationwide before FINRA. For a free consultation with an attorney on how to potentially recover your losses, call 888-760-6552, or visit our website at: https://www.securitieslawyer.com.
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