Regulatory Notice 23-02

The Financial Industry Regulatory Authority, FINRA, has published new Regulatory Notice 23-02 to announce final modifications to its Rule 2231 pertaining to customer account statements which includes requirements on the content, frequency, and form of account statements that must be sent to clients on a regular basis.
Specifically, FINRA is amending this Rule to align it with a similar Rule applicable only to FINRA members that are also members of the New York Stock Exchange (NYSE), namely Temporary Dual FINRA-NYSE Rule 409T (Statements of Accounts to Customers) and corresponding interpretations Temporary Dual FINRA-NYSE Rule Interpretation 409T, by adding the following new supplementary materials to Rule 2231 as follows:
– Supplementary Material .01 (Compliance with Rule 4311 (Carrying Agreements)) which reminds member firms to specify just which party is responsible in carrying account agreements for the sending of account statements to clients;
– Supplementary Material .02 (Transmission of Customer Account Statements to Other Persons or Entities) which permits member firms to sent the customer account statement to other persons or firms designated by the client provided the instructions were made in writing;
– Supplementary Material .03 (Use of Electronic Media to Satisfy Delivery Obligations) which „allows a member firm to satisfy its delivery obligations under the rule by using electronic media“;
– Supplementary Material .04 (Compliance with Rule 3150 (Holding of Customer Mail)) which reminds member firms that they are permitted to hold mails on behalf of a customer provided that certain conditions are met;
– Supplementary Material .05 (Information to be Disclosed on Statement) which requires that „the following information to be clearly and prominently disclosed on the front of the account statement:
– (1) the identity of the introducing and carrying firm, if different, and their respective contact information for customer service, permitting the identity of the carrying firm and its contact information to appear on the back of the statement provided such information is in “bold” or “highlighted” letters;
– (2) that the carrying firm is a member of the Securities Investor Protection Corporation (SIPC); and
– (3) the opening and closing balances for the account“.
– Supplementary Material .06 (Assets Externally Held) which requires that any assets held by the customer with other firms shall be clearly separated in the account statement;
– Supplementary Material .07 (Use of Logos, Trademarks, Etc.) requires that the firm or entity whose logo or trademark is shown on a customer account statement is clearly identified in the statement and that such logos and trademarks are not used in deceptive ways; and
– Supplementary Material .08 (Use of Summary Statements) which stipulates new requirements as to the content of summary statements provided by multi-entity member firms (content, level of aggregation, etc.)
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The new supplementary material will come into force on January 1, 2024.