FINRA’s new suitability rule looms, with expanded customer-information requirements

FINRA’s new suitability rule expanding customer information requirements and applying them to more transactions the is set to go into effect July 9, after delays requested by firms to get more time to adapt. The rules will require a broker dealer or their associated persons to have a “reasonable basis” to believe a recommended transaction is suitable for the customer, based on information obtained through “reasonable diligence” to understand a customer’s investment profile.”FINRA and representative broker dealers discussed the new rule in a New York panel last week at the Securities Industry and Financial Market Assosciation, that followed issuance in May of further FINRA guidance on how the rule should be applied, in response to member questions. More on Reuters here.

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