SEC Approves FINRA "Restricted" Designation Rule

March 2nd, 2023, 12:40 PM

Investors and advisors now will have access to more information concerning non-compliance among firms. The Securities and Exchange Commission (SEC) has approved FINRA's new rule allowing it to display alerts on BrokerCheck if FINRA has flagged a brokerage firm as restricted.

The designation will be visible on a firm's BrokerCheck page that will send prospective clients to a page noting that the firm is restricted because FINRA deems it to present a high degree of risk to the investing public. 

The designation also will indicate that FINRA has required the subject brokerage to deposit funds necessary or appropriate to protect investors and the public interest because of its significant history of misconduct. A FINRA spokesperson told AdvisorHub that the regulator would provide an effective date for when the designations will begin to appear in an upcoming regulatory notice. 

Financial Advisor Transitions consults advisors nationwide to explore employment transition options and to preserve and protect their practice in any transition that they make.

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Blog

SEC Approves FINRA "Restricted" Designation Rule

March 2nd, 2023, 12:40 PM

Investors and advisors now will have access to more information concerning non-compliance among firms. The Securities and Exchange Commission (SEC) has approved FINRA's new rule allowing it to display alerts on BrokerCheck if FINRA has flagged a brokerage firm as restricted.

The designation will be visible on a firm's BrokerCheck page that will send prospective clients to a page noting that the firm is restricted because FINRA deems it to present a high degree of risk to the investing public. 

The designation also will indicate that FINRA has required the subject brokerage to deposit funds necessary or appropriate to protect investors and the public interest because of its significant history of misconduct. A FINRA spokesperson told AdvisorHub that the regulator would provide an effective date for when the designations will begin to appear in an upcoming regulatory notice. 

Financial Advisor Transitions consults advisors nationwide to explore employment transition options and to preserve and protect their practice in any transition that they make.

Return to All