Industry to Finra: Why disclose exam scores?
Industry observers are wondering why the Financial Industry Regulatory Authority Inc. has issued a proposal to disclose licensing…
Industry observers are wondering why the Financial Industry Regulatory Authority Inc. has issued a proposal to disclose licensing exam scores on its BrokerCheck system.
Finra requested comments several weeks ago about disclosing more through the disciplinary reporting system, including exam scores, broker termination information and more historical data.
The request, Finra Regulatory Notice 12-10, is part of a larger review of BrokerCheck mandated by the Dodd-Frank reform law.
Observers are confounded by the idea of publishing exam scores.
“I believe publishing test scores makes no sense for someone who has been in the business for over 25 years,” April Kvalvik, a broker with Bank of America Merrill Lynch, wrote in a comment letter.
“As a [certified financial planner], I have mastered many complex areas in investing and financial planning. I do not think that scores from a 25-year-old test are relevant,” Ms. Kvalvik wrote.
“Such scores reflect only the knowledge of regulatory requirements at the time of the test, and not investment knowledge or any relevant industry skills. In fact, the very act of publishing such scores would be misleading, as it connotes validity … in selecting a broker,” wrote David Wiley, president of Wiley Bros.-Aintree Capital LLC.
“I would like the grades of all Finra and SEC employees, schools they attended, last 10 years of employment, criminal history … bankruptcy filings and any financial judgments … made public,” wrote Catherine O’Brien, a representative at Crowell Weedon & Co.
Finra also is considering making the massive BrokerCheck database available to private vendors. Currently, it blocks automated download tools from accessing the system.
“It is important that Finra and the [Securities and Exchange Commission] make the data underlying these databases available for download in electronic, machine-readable format so that nonprofit entities, as well as journalists and other investigators, are able to gain access and do sophisticated investigations using the information,” wrote Ellen Miller, executive director of The Sunlight Foundation.
Finra spokeswoman Nancy Condon declined to comment.
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