May 1 (Reuters) - Wall Street’s industry-funded watchdog is asking for public input on a retooled plan designed to make it easier for investors to research the backgrounds of brokerage firms and brokers.
The Financial Industry Regulatory Authority (FINRA) wants brokerages to feature a prominent link on their websites and certain social media sites that automatically directs the public to FINRA’s free online disclosure database known as BrokerCheck.
FINRA’s proposal, published on Wednesday, revamps an earlier version that some brokerage industry groups had said was unworkable because of concerns about how to display the link on social media sites such as Facebook and Twitter. FINRA had filed that version with the U.S. Securities and Exchange Commission, which must review and approve its rules, but then withdrew it.
The newly proposed version aims to address those concerns, in part, by clarifying the contexts in which a link to BrokerCheck must appear, the regulator said in its notice. For example, the link would not have to appear in websites run by outside companies that independently provide information about financial advisers, FINRA said.
The plan would still require firms to include a link to BrokerCheck from their websites and on profile pages they publish for individual brokers.
FINRA reviewed several social media sites, including Facebook and Google Inc’s YouTube and conducted trials to help determine where firms could place a direct link to BrokerCheck, it said. The link could appear in a section common to those sites where users include general information about their individual pages under headings such as “about” or “background summary.”
Twitter presents challenges because of space limitations and a set-up that does not let users post links in their profiles that automatically direct the public to other sites. The proposal would allow for alternatives, such as mentioning the BrokerCheck website address, but not including an automatic link to the site, FINRA said.
FINRA's new proposal is here: bit.ly/1uaabRu
Comments are due to FINRA by June 16. (Reporting by Suzanne Barlyn; Editing by Cynthia Osterman)