A fight is brewing over proposed changes to FINRA’s Central Registration Depository (CRD) expungement procedure. The SEC, FINRA, and the Public Investors Advocate Bar Association (PIABA) are at odds over whether the expungement procedure has become too liberal. FINRA is responsible for the CRD — the database behind BrokerCheck.
Adding a Custodian to Your Registered Investment Advisor Business
More and more registered representatives are seeking to expand or transition into the registered investment adviser, or RIA, sphere more than ever before. While some financial advisors are looking to relieve themselves of FINRA’s increasingly harsh sanctions and its badly-flawed arbitration process, others are simply looking to make the addition of an RIA to their existing business as a broker.
What You Should Know About FINRA’s Background Check Requirements
FINRA Rule 3110 pertains to its member firms’ supervision of associated persons. It requires that “[e]ach member shall establish and maintain a system to supervise the activities of each associated person that is reasonably designed to achieve compliance with applicable securities laws and regulations, and with applicable FINRA rules. The final responsibility for proper supervision shall rest with the member.” The Rule then outlines requirements pertaining to firms’ supervisory system, written procedures, internal inspections, transactions review and investigation, and responsibility to investigate applicants for registration.
Why are some terminations not publicly disclosed on BrokerCheck?
Any time a rep leaves a firm, they are required to file a Form U5 describing the circumstances under which the rep departed. On this week’s Ask An AdLaw Expert, we talk with AdvisorLaw Founder and President, Doc Kennedy, MBA, J.D. about how firms typically determine the type of termination that will be reported on an advisor’s public record. Due …
What is FINRA Rule 1017(a)(7)?
The effects and consequences of disclosures on advisors’ records have been growing larger and more severe over the past several years. With the implementation of the requirement to provide a readily-apparent reference and hyperlink to BrokerCheck in 2016, the broker’s public records became more visible to current and potential clients. Information that was once primarily reserved to be viewed by industry insiders became instantly accessible not just to clients — but also to the general public. The impact on advisors’ professional and personal reputations is unquestionable.
Rule 4111: FINRA Punishes Advisors with Checkered Past
On September 28, FINRA adopted its previously proposed Rule 4111 — Restricted Firm Obligations. The Rule applies to broker-dealers with a history of misconduct or those with a concentration of reps with such histories.