Legal Alerts

FINRA’s Revised Brokercheck Proposal Does Not Require a Twitter Link

Securities Practice Group Legal Update
04.01.14

This spring, the FINRA Board of Governors authorized FINRA to seek comments on a proposal to amend FINRA Rule 2210 (Communications With the Public) to require firms to include a readily apparent reference and link to BrokerCheck on any member firm's website that is available to retail investors.

A version of this rule was originally proposed in 2013, and was subsequently rejected after significant industry resistance. The original BrokerCheck link requirement was initially proposed as an amendment to Rule 2267 (Investor Education and Protection) and required that members include a prominent description of and link to FINRA BrokerCheck, as prescribed by FINRA, on their websites, social media pages and any comparable Internet presence relating to a member’s investment banking or securities business maintained by or on behalf of any person associated with a member.

The original proposed amendment was universally panned by industry members. A concern of members was that the proposed amendment as written did not adequately address the social media implications of such a requirement. In particular, members were concerned that the amendment’s failure to address the space limitations of some forms of social media, such a Twitter’s 140 character limit, would make compliance nearly impossible.

Accordingly, in response to the negative member feedback, FINRA withdrew the proposed rule change last year. FINRA is now working on a new version of the rule. To avoid confusion on the social media front, however, FINRA has indicated the new rule would not apply to, among other things, retail communication that is posted on an online interactive electronic forum (such as a message board, Twitter feed or chat room).

An additional update will be provided as information becomes available.

For daily industry-related updates, follow Sharda on Twitter @shardakneen.

Contact
LaFromboise, Antoine J.
Communications and Brand Manager
T 612.371.3269

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