FINRA Withdraws Customer Statement Rule
The U.S. Financial Industry Regulatory Authority has withdrawn a proposal that would have required brokerages to send account statements to their customers more frequently.
The plan sent to the Securities and Exchange Commission in 2009 would have required broker dealers to send monthly statements to customers if certain activity such as stock trading or withdrawals occurred after their quarterly statement was prepared. The goal was to protect investors against fraud and errors, said FINRA in its initial proposal.
Securities industry trade groups and brokerages opposed the need for paper-based customer statements; in 2009 the Securities Industry and Financial Markets Association said that online access and customer service call centers replaced the need for customer account statements.
Two years later, the self-regulatory authority for broker-dealers, has revised the proposal to include some exceptions to the circumstances in which brokerages would need to send monthly statements such as transfers of un-invested assets into and out of money market funds as part of automatic sweep programs.
Written by Chris Kentouris, Editor-in-chief (Chris can be contacted through Chris.Kentouris@hotmail.com)-