Comment Letter on Expungement Procedures

On May 21, FSI submitted a comment letter supporting FINRA's proposed rules for expungement procedures. In 2009, FSI opposed FINRA's decision to expand Form U4 reporting requirements to include allegations of sales practice violations made against a registered person in arbitration or litigation in which that person is not named a party.

Unfortunately, FINRA adopted the requirement despite our concerns. The requirement has created a new problem for financial advisors - a large number of unnamed persons who want disclosures expunged from their CRD records because they believe that the allegations against them are unfounded. FINRA's current rules do not provide an effective process to facilitate these expungement requests. As a result, FSI's letter supports FINRA's plan to create a new expungement process for these Form U4 disclosures.

Click here to read the letter.