FINRA Clarifies How BDs Should Handle Departing Rep Information
April 16, 2019 by Melanie Waddell
Broker-dealers must “promptly and clearly” communicate a registered rep’s departure to clients — including the departing rep’s contact information — and provide “timely and complete” answers to clients’ queries about the departing rep, the Financial Industry Regulatory Authority states in a new Regulatory Notice.
However, FINRA’s notice is vague when it comes to whether broker-dealers must tell clients a parting rep was fired, a lawyers’ group says.
In Reg Notice 19-10, FINRA states that the broker-dealer self-regulator has “consistently sought to ensure that customers can make a timely and informed choice about where to maintain their assets” when their registered rep leaves a member firm.
FINRA states that it expects that when a rep leaves a firm, a BD should: