FINRA Requests Comment on Proposed Rule Requiring Disclosure of Conflicts of Interest in Recruitment Incentives

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Member firms often offer financial incentives when recruiting registered representatives. The Financial Industry Regulatory Authority has stated that it believes such financial incentives raise conflicts of interest that often are not disclosed when registered representatives ask their former customers to transfer to their new firm. Thus, FINRA is seeking comment on a proposed rule that would require a recruiting member firm to make detailed disclosure of the recruitment incentives offered to a registered representative who has been recruited. Comments must be submitted to FINRA by March 5.

FINRA Regulatory Notice 13-02 is available here.

 

Topics:  Conflicts of Interest, FINRA, Recruitment Incentives

Published In: Administrative Agency Updates, Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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