FINRA Proposes Rule Change Relating to Rule 4512 (Customer Account Information)
On November 28, the Financial Industry Regulatory Authority filed a proposed change to Rule 4512(a)(3) (Customer Account Information) with the Securities and Exchange Commission. FINRA Rule 4512(a)(3) currently requires member firms to obtain the “wet” signature of each named, natural person authorized to exercise discretion in an account. Members have stated that the requirement to obtain a “wet” signature raises operational costs without providing meaningful investor protections and that the requirement puts members at a competitive disadvantage to investment advisers (who are allowed to obtain electronic signatures).
Accordingly, FINRA is proposing to amend the Rule to also provide members with the option of obtaining an electronic signature. Further, FINRA also is proposing to amend the Rule to clarify that it is limited to discretionary customer accounts maintained by a member for which associated persons of the member are authorized to exercise discretion.
If the SEC approves the proposed rule change, FINRA will announce its effective date in a Regulatory Notice within 60 days of such approval, and the effective date of the rule change will be no later than 30 days following such Regulatory Notice.
The proposed Rule change is available here.