Finra Erects One-Year Revolving-Door Barricade for Officers
Former officers of the Financial Industry Regulatory Authority will be banned from making client appearances or testifying as experts in Finra cases within one year of leaving the regulator, according to a proposed rule.
The rule, which would be effective July 2, 2012 if approved by the Securities and Exchange Commission, is meant to “uphold a high degree of fairness in disciplinary and similar proceedings that take place before FINRA hearing panels and other FINRA adjudicators,” the industry-funded brokerage regulator wrote in its filing with the SEC today.
“One reason we took a look at this was that the revolving- door issue was raised during the Dodd-Frank process,” said Nancy Condon, a Finra spokeswoman, referring to last year’s regulatory overhaul. “We felt it was an issue that we should address at this time.”
Another self-regulating organization overseen by the SEC, the Public Company Accounting Oversight Board, has a similar revolving-door provision in place.
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