November 26, 2014

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November 25, 2014

November 24, 2014

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 D. Van De Graaff, Katten Muchin Law Firm, Financial Institutions Attorney
Partner

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.

312-902-5227
Staff Attorney

Tanja Samardzija concentrates her practice in financial services. Ms. Samardzija began her legal career as a litigator before embarking on a career in market regulation at the Chicago Board Options Exchange (CBOE). Ms. Samardzija’s work at the CBOE has familiarized her with a wide variety of regulatory matters including exchange and SEC investigations; compliance issues related to registrations, market making and options order handling; and risk management controls and supervisory procedures for brokers or dealers with market access. In addition to being thoroughly involved in...

312.902.5311