The Financial Industry Regulatory Authority (FINRA) will launch this week an enhanced disclosure review process officials said is designed to deliver significant benefits to brokerage firms, as well as the investing public.
“Small firms, in particular, should see meaningful cost savings and reduced regulatory burden through this enhancement,” Derek Linden, FINRA executive vice president of Registration and Disclosure, said. “The timeliness of FINRA’s review will also help assure investors that the BrokerCheck information about their representative is as accurate, complete and up-to-date as possible.”
The effort calls for FINRA to perform a public records review within 15 calendar days after a firm applies to register an individual, noting the review would enhance the quality of information about individual brokers available to investors and reduce industry costs.
When a firm wants to hire a registered representative, officials said, it must fill out and submit a Form U4 – the uniform registration application – to the Central Registration Depository (CRD), the database for the registrations of firms and individuals in the brokerage industry.
Form U4 includes a variety of information on a representative, including financial disclosures, and is used by FINRA and federal and state regulators for licensing and other purposes.
FINRA officials said the organization is a not-for-profit dedicated to investor protection and market integrity, regulating one critical part of the securities industry—brokerage firms doing business with the public in the United States.