02.10.26

FINRA Will No Longer Vet Negative Consent Letters

by: Alex Padalka

The Financial Industry Regulatory Authority (FINRA) will no longer review drafts of “negative consent” letters used by broker-dealers for bulk account transfers or conversions, effective April 1. These letters inform customers that their accounts will be moved unless they opt out. FINRA cited that prior reviews could create unnecessary burdens and issued guidance on best practices. Firms should notify customers at least 30 days in advance, provide clear information on services or products after the change, explain opt-out procedures, avoid charging for transfers due to negative consent and allow customers a short period to select alternatives. Authorization during onboarding and careful handling of free credit balances are also recommended.

Read the full article on Financial Advisor IQ