Links to Finra BrokerCheck reports may soon be required for the websites of broker-dealers, registered reps and branch offices. A Finra proposal to require the links has gotten generally good reviews from industry commenters.
Comments on the rule proposal, now pending SEC approval, closed yesterday.
Under the plan, Finra would require a “readily apparent reference” and hyperlink to the BrokerCheck system on a webpage that a brokerage firm provides for retail investors, and on any other webpage that includes a profile of registered persons.
Unlike an earlier plan floated in 2013, which was withdrawn over concerns about implementation, the current proposal would not require that BrokerCheck links be placed on third-party social media sites or directories.
Finra also dropped an earlier requirement for “deep links” to the specific BrokerCheck pages that show disclosure information for individual brokers. The proposed link will now take investors to the BrokerCheck homepage.
Industry groups still want some guidance on how the rule would work.
In a comment letter Monday, the Financial Services Institute asked for “guidance that retains the rule’s exclusion of social media and other third-party websites and clarifies the status of websites operated by independent contractor financial advisors.”
The FSI also wants clarification about third-party websites of non-Finra members, such as sites run by credit unions that contain profiles of financial advisors.
Likewise, the Securities Industry and Financial Markets Association asked for more guidance on the application of the rule to websites maintained by independent reps.
The North American Securities Administrators Association, which represents state regulators, said it supported the proposal but was “disappointed that this proposed rule continues to omit direct BrokerCheck … deep links to individual broker records, arguably the most effective part of the 2013 proposal.”
The rule’s effective date would be 180 days after notice of SEC approval was published.
The FSI wants that time extended to a full year because implementation “would likely require considerable changes to thousands of retail investor-facing websites” of independent advisors.