Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Thursday, October 28, 2010

FINRA Proposes New Disclosures from Broker-Dealers to Retail Investors

FINRA requests comment on  a concept proposal to require broker-dealers to provide a disclosure statement for retail investors before commencing a business relationship with them.  As conceived by FINRA staff, a possible new rule proposal would require a firm, at or prior to commencing a business relationship with a retail customer, to provide to the customer a written statement that sets forth the types of brokerage accounts and services the firm provides to retail customers and the conflicts associated with such services. A “retail customer” would mean a customer that does not qualify as an institutional account under NASD Rule 3110(c)(4), essentially entities and natural persons with total assets of less than $50 million.    The comment period expires December 27, 2010.

http://lawprofessors.typepad.com/securities/2010/10/finra-proposes-new-disclosures-from-broker-dealers-to-retail-investors.html

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