FINRA will file with the SEC a proposed rule change regarding recruiting bonuses paid to Registered Representatives for moving from one broker-dealer to another. There are two mechanisms to the proposal; disclosure and reporting to FINRA.
The disclosure to customers is designed to assist them in making a decision whether or not to move with their advisor and what the financial impact, if any, will be on their account. The disclosure will be made by the recruiting firm to former clients who are contacted about the move of assets and relationship. The recruiting firm will also be required to disclose compensation ranges starting at $100,001. Additionally, the structure of the compensation will need to be disclosed, including any upfront and/or future payments.
Reporting to FINRA, the recruiting firm will further be required to provide FINRA information when a representative will receive an increase in total compensation greater than 25% or $100,000 which ever is greater over the prior year’s gross compensation. This information will be used during FINRA examinations.
RegMaven assists clients in understanding, building and implementing Policies and Procedures to address new, amended and existing compliance requirements using a risk-based approach with your firm. Contact us today to learn more about how RegMaven can work with you. We can be reached at www.regmaven.com or info@regmaven.com or call us for a brief initial consultation at no cost at 603.965.7791.
Leave a Reply
You must be logged in to post a comment.