An amendment to FINRA Rule 2210 (Communications with the Public) has taken effect as of June 6, 2016. Originally announced in Regulatory Notice 15-50, the amendment adds new sections (d)(8)(A) and (B) to the rule, requiring member firms to include “a readily apparent reference and hyperlink to BrokerCheck” on certain web pages intended to be viewed by retail investors. There are no other changes to the rule.
What Does the Amendment Require?
BrokerCheck is FINRA’s web-based system that provides information on the professional background, business practices, and conduct of FINRA member firms and associated persons. Under the new Rule 2210(d)(8)(A), “a readily apparent reference and hyperlink to BrokerCheck” must be included on a member firms’ website. The link must be located on:
- The initial page of the website that is intended to be viewed by retail investors; and
- Any other webpage containing the professional profile of a registered person who works with retail investors.
New Rule 2210(d)(8)(B) provides the following exceptions to the hyperlink requirement:
- Member firms that do not provide products or services to retail investors; and
- Lists or directories of financial advisors limited to names and contact information.
FINRA provided further guidance, in Regulatory Notice 15-50, that the requirement does not apply to third-party social media websites, such as Twitter and LinkedIn.
Compliance with the New Requirements
Firms may satisfy the new requirement by adding a link that takes the viewer directly to the BrokerCheck homepage. To assist its member firms, FINRA has created a webpage providing suggested text, BrokerCheck logos, and other information useful for complying with the new requirements. The webpage also includes instructions and tools for creating a direct link to a firm or registered person’s BrokerCheck profile, bypassing the BrokerCheck homepage entirely.
Member firms are not required to use the tools FINRA has provided. However, FINRA has provided guidance with respect to what constitutes “a readily apparent reference and hyperlink,” directing firms to “adopt the perspective of a reasonable retail investor when making this determination.” Firms are advised to consider the placement of the link, the ease of navigation, and the size and color of the font.
Firms that have not yet updated their websites to include the required information and hyperlink are out of compliance with the new rule and run the risk of unwanted attention from FINRA.
Ratner Law regularly counsels FINRA member firms and associated persons on regulatory and compliance issues. We encourage anyone with questions about the amendments to Rule 2210 (or any other applicable law, regulation, or rule) to contact Todd Ratner at 804-665-1042 or firstname.lastname@example.org.