Information Notice – 5/18/18

Enhancements to FINRA’s Disclosure Review Process Relating to Public Financial Records

Summary

FINRA is making enhancements to its disclosure review process that will permit firms to rely on FINRA’s verification process for purposes of compliance with the requirement to conduct a search of public records relating to bankruptcies, judgments and liens. Specifically, beginning on July 9, 2018, FINRA will conduct a public records search within fifteen calendar days from the date of an applicant’s Form U4 (Uniform Application for Securities Industry Registration or Transfer) and provide member firms any information resulting from such a search if such information is different from what was reported in the applicant’s Form U4. These enhancements are likely to: (1) reduce the costs to firms associated with conducting these public records checks, which often involve finding and hiring a vendor; (2) result in more timely reporting of disclosure information to the benefit of regulators, investors and firms; and (3) result in a significant reduction of late disclosure fees related to judgments and liens.

Questions regarding FINRA’s enhanced disclosure review process should be directed to:

  • Mario DiTrapani, Vice President, CRD/Public Disclosure, at (240) 386-4796; or
  • Ronald Petersen, Senior Director, CRD/Public Disclosure, at (240) 386-4767.