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FINRA Bonus Disclosure Rule to SEC

CW Logo SmallDear Friends,

On March 10, 2014, FINRA filed a proposal with the SEC requiring brokers who receive more than $100,000 in incentive compensation to switch firms, to disclose to clients how much they are paid. Brokers would disclose a compensation range in $500,000 to $1,000,000 bands.

The proposed rule was approved by FINRA in September 2013, in an effort to ensure that customers are aware of potential conflicts of interest in the recruiting process. The main goals of the rule are to:

  • Clarify to customers the possible costs of moving with their broker to a new firm; and
  • Assist FINRA examiners in assessing systems to monitor conflicts of interest and to detect business conduct abuses attributable to recruitment compensation incentives.

Please click here to view the complete text of the proposed rule. The rule is now subject to public comment and review by SEC officials.

Please feel free to contact us with any questions at (212) 867-0200 or e-mail us at info@counselworksllc.com.

Thank you,

CounselWorks

About CounselWorks LLC

CounselWorks is a strategic business and regulatory consulting firm, that provides project-based consulting and manages compliance and regulatory programs for hedge funds, private equity firms, investment companies, broker-dealers and investment banks.
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