On June 29, 2015, FINRA filed with the SEC a proposed rule change to amend FINRA Rule 2210 (Communications with the Public) to require that member firms include BrokerCheck links on their websites. The new proposal, if approved, would require, “a readily apparent reference and hyperlink to BrokerCheck on: (i) the initial webpage the member intends to be viewed by retail investors; and (ii) any other webpage that includes a professional profile of one or more registered persons who conduct business with retail investors.” See Proposed FINRA Rule 2210. A link would not be required on a website of a member firm that does not conduct retail business.
FINRA believes the proposed rule is aligned with its goal of increasing usage of BrokerCheck, and will help investors make well-informed choices about the individuals and firms with which they conduct business. According to FINRA, the proposed rule change will make it easier for investors to find BrokerCheck. FINRA estimates that the proposed rule will impact approximately 3,800 members, with various implementation costs depending on the size of the member firm (roughly $2,400 implementation costs for large members, and $128 for mid-size and small members).
In January 2013, FINRA filed a proposed rule change with the SEC to amend FINRA Rule 2267 (Investor Education and Protection) which would have required all members to include a description of and link to BrokerCheck on their websites, social media pages, and any comparable Internet presence. The proposed rule would have also required that all member firms include a description of and link on websites of third party sites relating to any member’s investment banking or securities business maintained by or on behalf of the member. Further the proposed amendment required deep links to BrokerCheck summary reports. These proposed amendments were met with opposition. Commenters voiced concerns with respect to implementation, and the lack of guidance concerning several terms and phrases in the proposed amendment. FINRA believes that its revised proposal addresses many of the previous concerns of the original proposal. For example, the new proposed rule excludes members that do not service retail investors. The revised proposal also responds to previous concerns with respect to communications on third party websites that are not controlled by the member (it now limits the application to websites of a member). The revised proposal also no longer requires a deep link to a BrokerCheck report of the member or registered person, instead, the new proposed rule simply requires a link to the BrokerCheck homepage.
Following the SEC’s approval, FINRA will announce the implementation date of the proposed rule change in a Regulatory Notice. The effective date would be no later than 180 days following FINRA’s Regulatory Notice publication.