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FINRA Issues Regulatory Notice Regarding Departing Registered Representatives

On April 5, the Financial Industry Regulatory Authority issued Regulatory Notice 19-10 addressing the responsibilities of member firms when communicating with customers about the departure of registered representatives who have direct contact with customers in the conduct of such member firm’s securities sales. The Notice reinforces two key expectations related to such communications.

First, in the event of a registered representative’s departure, member firms are expected to promptly and clearly communicate to affected customers how their accounts will continue to be serviced so that customers can make informed decisions about their accounts. Second, member firms are expected to communicate clearly when asked questions by customers about the departing registered representative. Such communications should, for example, clarify that the customer has the choice to (1) retain his or her assets at the current firm and be serviced by a new registered representative assigned by the firm or chosen by the customer, or (2) transfer such assets to another firm. As with all customer communications, FINRA expects that the information provided by member firms about the departing registered representative is fair, balanced and not misleading.

The Notice is available here.

©2019 Katten Muchin Rosenman LLP

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About this Author

Janet M. Angstadt, Securities, Financial Services, Chicago, Lawyer, Katten Law FIrm
Partner

Janet M. Angstadt is the head of Katten's Chicago Financial Services practice. She focuses her practice on broker-dealer and exchange compliance issues and advises companies on matters regarding compliance with the regulations of the US Securities and Exchange Commission (SEC) and self-regulatory organizations (SROs).

Janet represents clients in a wide range of legal and regulatory matters, including mergers and acquisitions, SRO investigations, compliance issues related to registrations, sales practice, short sales, Regulation NMS, market-making and...

312.902.5494
Stanley V. Polit, Katten Muchin, Financial Services lawyer, Corporate Regulatory Matters Attorney
Associate

Stanley Polit concentrates his practice in transactional, corporate and regulatory aspects of financial services matters. Stan is able to provide legal services to a wide variety of clients including proprietary trading firms, hedge funds, broker-dealers, registered investment advisers, commodity trading advisers, financial institutions and general corporate clients.

Prior to joining Katten, Stan served as a council member for a national crisis management firm, where he specialized in crisis communication and merged media strategies. He has lectured extensively and conducted trainings related to these topics at numerous national and international conferences, including the National Communication Association's National Convention, the International Crisis and Risk Communication Conference and the Disaster Recovery Journal's World Business Continuity Conference.

312.902.5420