BrokerCheck Will Soon Be Linked to FINRA Member Firms’ Websites
Investors should use all available tools to research their financial advisor, such as the Financial Industry Regulatory Authority’s (“FINRA”) BrokerCheck website. BrokerCheck provides publicly available information about brokerage firms and their registered representatives, such as disciplinary actions, licenses and employment history.
The Securities and Exchange Commission (“SEC”) approved a proposal to amend FINRA Rule 2210 in October 2015 that will require brokerage firms to include a “readily apparent reference and hyperlink to BrokerCheck” on the firms’ website. Specifically, the “initial webpage that the member intends to be viewed by retail investors” as well as “any other webpage that includes a professional profile of one or more registered persons who conducts business with retail investors” beginning on June 6, 2016. The SEC stated that the hyperlink requirement to BrokerCheck from FINRA member firms’ websites will create easy access to brokers by increasing investors’ “awareness and use” of the tool. The rule also will apply to websites moderated by financial advisors that are independent contractors.
Certain potential requirements were excluded from the proposal, as they were viewed by FINRA as “overly burdensome” and would “require significant system and operational changes without commensurate benefits.” One such exclusion was a requirement that FINRA member firms link to BrokerCheck on third-party websites, such as LinkedIn or Facebook, which are not controlled by FINRA member firms. Additional information can be found here.
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About Christine Goodrich
Christine E. Goodrich is Senior Associate with Faruqi & Faruqi’s New York City office. Ms. Goodrich’s practice is focused in securities arbitration, litigation and regulation.