How FINRA’s New Rules Can Affect Your Employability

Financial advisors recognize how much disclosures can negatively impact their professional reputations. In recent years, the Financial Industry Regulatory Authority (FINRA) has tightened the disclosure requirements, mandating that the broker’s records remain accessible to the public via BrokerCheck. Now, the implementation of FINRA Rule 1017(a)(7) sets new requirements for those firms interested in hiring a broker with disclosures, presenting potential hires with additional barriers to employment. Here’s what you need to know about the ramifications of this new rule.

Impacts on The Hiring Process

Under FINRA’s new rule, a broker firm that’s interested in hiring an individual with either one or more “final criminal matters” or two or more “specified risk events” within the previous five years must file a Continuing Membership Application (CMA), seek a Materiality Consultation (MC), or both. The hiring firm must first seek an MC and wait for FINRA to determine whether the firm may move forward with the hiring process or whether such an action would lead to “material change in business operations,” necessitating the filing of a CMA.

How Unfair Disclosures May Leave Financial Advisors Vulnerable

FINRA included language to narrow the scope of the new rule, limiting “specified risk events” to those that have been substantiated in some way. While FINRA aims to keep financial advisors who have been subjected to baseless or inaccurate disclosures from suffering adversely from this new rule, brokers may still face barriers to employment and damage to their professional reputations. FINRA’s goal may be to hold firms more accountable for the actions of their employees to cultivate greater trust and respectability, but financial advisors who are struggling to have unfair disclosures removed from BrokerCheck may find themselves facing negative consequences.

How a Skilled Securities Law Attorney Can Help

If you need help with an expungement request or you simply want to learn more about how FINRA’s new rule changes may affect your employability and your future, get in touch with a knowledgeable securities law attorney to discuss your concerns. Your attorney will help you understand your options for defending your professional reputation and keeping your future as bright as possible.


Call Judex Law LLC today at (303) 523-4022 to discuss your goals with an experienced securities law attorney.

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