Proposal could ease broker job moves

The Securities and Exchange Commission has proposed modifications to its privacy regulations that would, among other things, allow a departing broker to take customer contact information. The proposal contains an exception to Reg SP, the agency's privacy regulations, which would permit one firm to disclose to another a customer’s name, address, telephone number and e-mail, and provide general descriptions of accounts and products held. A firm would have to invoke the exception before a rep could take the data. Currently, there is uncertainty over what information a broker can take without violating privacy rules and policies. Last August, the SEC sued Next Financial Group of Houston over alleged violation of privacy rules in its account transfer activity (InvestmentNews, Jan. 14). The client information in the proposed exception is basically the same kind of data allowed to be shared among firms under a 2004 broker recruitment protocol. Most of the major Street firms are signatories to the protocol. The SEC is now soliciting comments on its proposal.