Posts tagged rule 2243.
FINRA this week released its targeted exam letter requesting information on firms' conflict-of-interest policies surrounding broker compensation and retail accounts. The sweep follows up on FINRA's Conflicts Report from October 2013, which recommended changes to firm supervision and oversight of conflicts of interest. The letter requests extensive categories of information covering retail accounts during the period from August 2014 through July 2015. FINRA seeks information about firm policies and procedures to:
- Identify and manage conflicts;
- Surveillance of ...
Posted in: FINRA
Tags: broker compensation, burr forman, conflict-of-interest policies, finra, FINRA Conflicts Report, FINRA Sweep Exam on Compensation Conflicts, retail accounts, rule 2243, securities litigation, targeted exam letter
On Friday, June 20, 2014, the Financial Industry Regulatory Authority ("FINRA") withdrew its proposed Rule 2243, which would have required disclosure and reporting of FINRA member recruiting practices. Essentially, the rule would have required disclosure of a recruiting bonus for a representative that exceeded $100,000. The initial response to the proposed rule was mixed, but FINRA submitted the rule to the Securities Exchange Commission ("SEC") for approval earlier this year. In withdrawing the proposal, FINRA cited the rigid timeline for approval under the Dodd-Frank Act ...
FINRA has submitted a proposal to the SEC to adopt FINRA Rule 2243 (Disclosure and Reporting Obligations Related to Recruitment Practices). In FINRA's words, Rule 2243 would require, in some cases, "specific disclosure by the recruiting member firm of the financial incentives a representative receives as part of his or her relationship with the new firm. The recruiting member firm would be required to provide the disclosure before a former retail customer of the representative makes a final determination to transfer an account to the new firm." Specifically, disclosure would be ...