The Financial Industry Regulatory Authority (FINRA) has withdrawn its proposed rule with the SEC that would have required advisors using social media to post a link to BrokerCheck on social media sites, according to the Financial Services Institute (FSI), an advocacy group.
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BrokerCheck is a free research tool to help investors conduct background checks on current and former FINRA-registered brokerage firms and brokers, and financial advisors.
However, it met with strong opposition from industry experts who argue the rule is too onerous for firms and individuals to abide by.
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“We applaud FINRA’s decision to withdraw its proposed rule which would have required financial services firms and financial advisors to prominently display a link to BrokerCheck to social media, something that is out of the control of firms and advisors,” says David Bellaire, executive vice president & general counsel, FSI. “We believe that the proposed rule was vague, highly burdensome. There is simply no way in many cases for a link to BrokerCheck to be prominently displayed on social media sites and, therefore, the rule is impossible to implement.”