Regulatory Notice 23-07

Following a corresponding consultation in 2022, the Financial Industry Regulatory Authority, FINRA, has now published on its website its final rule amendment to FINRA Rule 8312 as regards disclosures on BrokerCheck®. BrokerCheck® is FINRA’s online tool to research the background and experience of financial brokers, advisers, and firms that are members of FINRA. Specifically, FINRA is now extending the disclosures made on BrokerCheck® to include information „as to whether a particular member firm or former member firm is currently designated as a “Restricted Firm” pursuant to Rule 4111 (Restricted Firm Obligations) and Rule 9561 (Procedures for Regulating Activities Under Rule 4111).“
The upcoming modification is intended to enhance investor protection, by (a) allowing investors to see whether or not issues have arisen in the past as regards a particular firm and (b) by enhancing the pressure upon member firms to live up to a high standard of conduct or improve on such following a designation.