2016 Small Firm Compliance, Rule Update - BrokerCheck Communication with the Public

SMALL FIRM COMPLIANCE CORNER - RULE UPDATE HEADS-UP 

TOPIC
BrokerCheck Communication with the Public

SUMMARY
If your firm provides products or services to RETAIL investors, then you are required to have a "readily apparent reference and hyperlink to BrokerCheck" on your Home page and any other webpage where you list professional profiles.

DESCRIPTION
In case you missed this, the SEC just approved FINRA's proposal to amend FINRA RULE 2210 to require each of its member's websites to include a readily apparent reference and hyperlink to BrokerCheck on:
i. the initial webpage that the member intends to be viewed by RETAIL INVESTORS; and
ii. any other webpage that includes a professional profile of one or more registered persons who conducts business with RETAIL INVESTORS.

These requirements would not apply to a member that does not provide products or services to retail investors, or to a directory or list of registered persons limited to names and contact information.

NOTES
I asked if a hyperlink to FINRA's home page, where there is a readily apparent click-through to BrokerCheck, would satisfy this rule amendment? The answer I received was NO; the hyperlink has to be to the BrokerCheck page directly, and it cannot be in the footer or buried in Terms & Conditions.

I asked what "readily apparent" means and was told that there are too many variations of websites in the retail investment industry for FINRA to concretely define "readily apparent". FINRA suggests that members follow the intent of the amendment and the intent is to make it very easy for RETAIL customers to research their broker's professional record via BrokerCheck.

FINRA has not issued an Effective Date yet, but by statute the effective date will be no later than 180 days following publication of the Reg Notice announcing Commission approval. So keep your eyes peeled for the Reg Notice and the Effective Date.

Best regards, 
PAIGE W. PIERCE