November 27, 2015

November 25, 2015

November 24, 2015

Financial Industry Regulatory Authority "FINRA" Requests Comment on Proposed Rule Requiring Disclosure of Conflicts of Interest in Recruitment Incentives

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.

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About this Author

James Van De Graaff, Katten Muchin Law Firm, Financial Institutions Partner, Chi

James D. Van De Graaff primarily represents broker-dealers, investment banks and market-making firms in the regulatory aspects of their business. He has more than 20 years of experience representing financial services clients in compliance reviews and training, mergers and acquisitions and responding to inquiries or investigations involving the US Securities and Exchange Commission (SEC) and securities self-regulatory organizations.

Formerly the general counsel of a full-service, regional securities broker-dealer and New York Stock Exchange...