SEC Approves Rule Mandating Web Site Links to BrokerCheck

 

On October 8, 2015, the Securities and Exchange Commission (“SEC”), approved changes to Financial Industry Regulatory Authority, Inc. (“FINRA”) Rule 2210 requiring FINRA member firms that have retail clients to include a link to FINRA’s BrokerCheck on their websites.  BrokerCheck is a free electronic tool sponsored by FINRA that allows the public to obtain information on brokerage firms and their representatives pertaining to registration status, employment history, and qualifications and licensing, along with any disciplinary history.

Under the amended Rule 2210, the hyperlink and a reference thereto will be required to be placed on the homepage of the brokerage firm’s web site, as well as any page on their website that includes professional information on the firm’s registered persons.

In response to proposed amendments, some commenters made suggestions for more robust linking requirements, such as including the link on social media pages, and requiring a “deep link” which would have required the link to lead directly to the BrokerCheck profile page for the firm and representatives.  However, the SEC and FINRA felt such was not necessary at this time given the additional costs and extent of operational changes that would be involved.

Even though the effective date of the amended Rule 2210 has not yet been announced, brokerage firms should begin reviewing their websites to determine what steps are necessary in order to comply. This also may be a good time to assess compliance with the other requirements under Rule 2210 surrounding communications with the public.  As a helpful tool, FINRA has detailed Q&As on its website covering Rule 2210.

CCLS can assist firms with performing all types of assessments, along with the implementation of any necessary procedures and controls.  For more information, please contact us at info@corecls.com or (619) 278-0020.