FINRA's board of governors on Thursday approved a rule proposal that would impose new limits on financial advisors' ability to remove information about customer disputes from BrokerCheck, the regulator's online portal where investors can find information about a registrant's legal, regulatory and disciplinary history.
Under the proposed rule, firms and their associates would be barred from reaching settlements with customers who are conditioned on the agreement not to oppose a broker's request to expunge information from
The rule would also block registrants from offering customers other forms of compensation in exchange for not opposing expungement.
"We continually make improvements to the arbitration and expungement process to further enhance investor protections," FINRA CEO
The rule now heads to the
The issue of expungements flared up late last year when the
At the time, FINRA acknowledged that it had "serious concerns" with the expungement process, saying that it would work to improve training for arbitrators and emphasize the "importance of the integrity of the information in the CRD system."
In a statement,
FINRA's board also approved a proposal to block
FINRA also moved Thursday to seek comment on a proposal that would require registrants to place a link to BrokerCheck on their websites.
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