Regulatory Outlook | 06.02.21
FINRA Withdraws Expungement Reform Proposal
FINRA has stopped an effort that would have made changes to the process that registered representatives can remove customer disputes from their records. The regulator was considering a proposal that would have created a special roster of arbitrators to hear expungement requests while limiting the timeframe for brokers to clear complaints from their profiles in the BrokerCheck database. FINRA filed the proposal with the SEC in September. But the proposal was “temporarily” withdrawn after talks with SEC staff. The regulator says more time is needed “so that we can further consider whether modifications to the filing are appropriate." The move comes after the Public Investors Advocate Bar Association released a report that was critical of FINRA's arbitration system and the proposed changes.
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