SEC Approves FINRA Proposal to Educate Customers on Costs of Account Transfers (Fed. Reg.)

The SEC approved FINRA Rule 2273 ("Educational Communication Related to Recruitment Practices and Account Transfers"). The SEC approval was published in the Federal Register. Rule 2273 establishes an obligation of a member firm to deliver an educational communication to former customers in contact with representatives who switch their affiliation to the member firm. The communication focuses on the costs of transferring accounts to the representative's new firm.

In response to comments requesting a delayed implementation date, FINRA stated that it will consider the need to develop compliance systems and make operational changes when establishing an effective date for the adopted rule.