More On Legal & Compliancefrom The Advisor's Professional Library
- Use and Misuse of Social Media Social media is an inexpensive and effective way to communicate with established and prospective clients. Nevertheless, when RIAs utilize social media to promote their advisory practices, they risk compliance problems for their firms.
- Do’s and Don’ts of Advisory Contracts In preparation for a compliance exam, securities regulators typically will ask to see copies of an RIAs advisory agreements. An RIA must be able to produce requested contracts and the contracts must comply with applicable SEC or state rules.
The Financial Industry Regulatory Authority (FINRA) is asking the Securities and Exchange Commission (SEC) to approve further amendments to BrokerCheck, which includes requiring firms to include a reference and a link to BrokerCheck on their websites.
The proposed changes were announced in a Sept. 14 letter from FINRA CEO Richard Ketchum.
In an attempt to "to facilitate and increase investor use of BrokerCheck information," member firms would have to include a reference and a link to BrokerCheck on their websites and on certain websites maintained by, or on behalf of, any person associated with a member firm. The amendments affect FINRA Rule 2267.
Amendments have also been proposed to the BrokerCheck Disclosure Rule 8312, making information easier to access regarding investment-related civil actions brought against associated persons by a state or foreign regulatory authority that have been dismissed pursuant to a settlement agreement.
FINRA also made changes to BrokerCheck in May, which included helping investors access broker-dealer and investment advisor registration information by providing:
- centralized access to licensing and registration information on current and former brokers and brokerage firms, and investment advisor representatives and investment advisor firms;
- the ability to search for and locate a financial services professional based on main office and branch locations, and the ability to conduct ZIP code radius searches (in increments of 5, 15 or 25 miles); and
- access to expanded educational content available on BrokerCheck, including new help icons that clarify commonly referenced terms throughout the system and within BrokerCheck reports.
After those changes were announced, Ketchum addressed concerns from brokers and advisors over whether their test scores would be revealed on BrokerCheck after the site's recent revamp.
But Ketchum quelled those concerns by stating that test performance “is not the type of information [FINRA] is interested in disclosing.”