FINRA Wants Complete Termination Details in U5s
FINRA has issued a Regulatory Notice reminding firms of their U5 disclosure obligations. FINRA warns firms that they “may not parse through the questions in a manner that would allow the firm to avoid responding affirmatively to a question.” FINRA also warns firms to include sufficient detail to allow a reader to understand the circumstances of a termination including identifying the policy violated and including sufficient facts and circumstances. FINRA also explains that firms “should err on the side of interpreting the term ‘investment related’ in an expansive manner” to include securities, commodities, banking, insurance or real estate.” Also, FINRA explains, an affirmative response may be required even if the matter is not securities-related where the person is associated with a BD, issuer, RIA, futures sponsor, or bank. FINRA explains that many constituencies rely on accurate disclosure including FINRA and other regulators deciding whether to pursue regulatory sanctions.
OUR TAKE: FINRA does not want whitewashed U5s. It wants to use the U5s as a reporting and information document for regulators and investors.
http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p122040.pdf
OUR TAKE: FINRA does not want whitewashed U5s. It wants to use the U5s as a reporting and information document for regulators and investors.
http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p122040.pdf
Posted by Todd Cipperman at 9/10/2010 7:20 AM 
Categories: Compliance and Operations
Tags: finra u5 details notice termination
Categories: Compliance and Operations
Tags: finra u5 details notice termination
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