FINRA to Expand BrokerCheck Service

? Expand the disclosure period for former brokers. At present, a broker's record is publicly available for two years after he or she leaves the securities industry. That two-year period coincides with the period in which an individual remains subject to FINRA's jurisdiction and within which an individual can return to the industry without having to take re-qualifying exams. The expanded BrokerCheck will make a former broker's record public for 10 years, allowing investors to access information about individuals who may work in other sectors of the financial services industry or who have attained other positions of trust.

? Further expand the amount of information that is permanently available on former brokers. In 2009, BrokerCheck started making information about final regulatory actions (such as bars and suspensions) against former brokers permanently available to the public. The expanded BrokerCheck will make additional information that has been reported to FINRA since 1999 permanently available; this will include reportable criminal convictions or pleas of guilty or nolo contendere; civil injunctions or findings of involvement in a violation of any investment-related statute or regulation; and arbitration awards or civil judgments based on the individual's involvement in alleged sales practice violations.

? Formalize the process for current and former brokers to dispute the accuracy of factual information disclosed through BrokerCheck. Brokers will be able to submit a written notice of the dispute to FINRA (the organization will post the appropriate form on its Web site) with all available supporting documentation. If FINRA determines that the dispute is eligible for investigation, it will add a general notation to the broker's BrokerCheck report, stating that the broker disputes certain information in the report, and that notation will be removed only when FINRA has resolved the dispute. If its investigation shows the information is in fact inaccurate, FINRA will update, modify or remove that information as appropriate.

FINRA said full details on BrokerCheck's expansion will be available in a FINRA Regulatory Notice to be published in the near future.

Read a story about FINRA's rules regarding social media from the archives of InvestmentAdvisor.com.

Michael S. Fischer ([email protected]) is a New York-based financial writer and editor and a frequent contributor to WealthManagerWeb.com.