FINRA Proposes Amendment to BrokerCheck® Disclosure Rule
Commentary by Annmarie Giblin
FINRA proposed amending FINRA Rule 8312 ("FINRA BrokerCheck Disclosure") to exclude the street address of a registered location that is also a private residence.
FINRA explained that BrokerCheck® was "designed to help investors make informed choices about the associated persons and broker-dealer firms with which they conduct or may conduct business." FINRA stated that the proposed rule change "would help address privacy and safety concerns raised by broker-dealer firms and their associated persons."
FINRA noted that the current rule provides protection against the release of certain information reported, such as a Social Security number, residential history, or physical description. FINRA's proposed change would amend the language of the current rule, in order to reflect that "the street address of a registered location identified as a private residence" is included in this list.
Commentary
This is another example of how regulatory agencies are identifying and closing gaps within their own information systems. FINRA, like the SEC, has been looking at cybersecurity and privacy concerns more closely in the last few years and, as a result, has been releasing publications and new rules aimed at shoring up the same. This focus on privacy and cybersecurity concerns will continue. For firms that are worried about future-proofing their compliance programs, a good rule of thumb is to practice data minimization as much as possible. Data minimization requires that only information that is absolutely necessary should be used and shared. Not only will adopting policies to accomplish data minimization across the firm help to future-proof compliance programs, but it will also help to greatly reduce the risks from third-party cybersecurity incidents.