Finra offers details on controversial bonus disclosure reg

The Financial Industry Regulatory Authority Inc. on Friday provided a few details about its upcoming proposal to require disclosure to clients of broker recruiting incentives. In a notice posted on its website, Finra said brokerage firms would have to disclose “enhanced compensation” to clients of the previous firm who move their account, or are contacted about moving their account, to the new firm. Disclosure would be required for one year after a broker moves. “The proposed rule would not apply to enhanced compensation of less than $50,000 or to customers that meet the definition of an institutional account,” the notice said. The posting today was a summary of the rule proposal, which has yet to be filed with the Securities and Exchange Commission for comment and approval. Disclosure of recruitment deals is controversial, and the proposal is bound to draw some heated comments from industry participants.