Outside FINRA offices in New York. (Photo: Ronald Pechtimaldjian)
The Financial Industry Regulatory Authority's new public records disclosure review process, which kicks in on July 9, will ease broker-dealers' and reps' public records search burden, at least somewhat, the Cosgrove Law Group noted in a Wednesday blog post.
The law firm noted FINRA's plans to conduct a public records search within 15 calendar days from the date of an applicant's Form U4 (Uniform Application for Securities Industry Registration or Transfer) and provide broker-dealers any information resulting from such a search if such information is different from what was the applicant reported.
The additional records search — which Cosgrove notes will satisfy the requirement to perform a search of records for judgments, bankruptcies and liens — was billed by FINRA's May 18 Information Notice as providing added benefit to member firms and registered persons.
FINRA stated in the notice that the change is likely to: "(1) reduce the costs to firms associated with conducting these public records checks, which often involve finding and hiring a vendor; (2) result in more timely reporting of disclosure information to the benefit of regulators, investors and firms; and (3) result in a significant reduction of late disclosure fees related to judgments and liens."
