SIFMA Supports FINRA-Proposed Rule on Educational Communication to Customers of Transferring Representatives
SIFMA expressed support for proposed rules to require the delivery of a FINRA-created educational communication to the customers of transferring representatives.
In particular, SIFMA expressed support for FINRA's efforts to craft simple disclosures in plain English that would permit investors to make more informed choices. SIFMA also made the following suggestions:
- FINRA should address various operational challenges in order to better align the proposal's direct and indirect costs with FINRA's stated goals.
- The proposal's supplementary material should include exceptions in order to narrow the scope of the delivery obligation to contexts in which recruitment compensation serves as a significant motivating factor for a change of firms by a registered person.
- Firms should permit other firms to alter the focus of the educational communication in appropriate contexts.
- FINRA should replace the use of "broker" in the educational communication with a term that is used more commonly in the industry.
See: SIFMA Response to FINRA Regulatory Notice 15-19.