Investment and Securities Account Restrictions Under FINRA’s Code of Conduct
The Financial Industry Regulatory Authority (FINRA) is the largest independent regulator for all securities firms doing business in the United States. FINRA’s mission is to protect America’s investors by making sure the securities industry operates fairly and honestly.
Along with their responsibilities to the securities industry, FINRA employees have responsibilities to all of FINRA’s other constituents, and to each other—and, therefore, must conduct themselves in a manner that commands the respect and confidence of everyone.
To this end, we have adopted the FINRA Code of Conduct, which outlines our ethical commitments and expectations, and provides guidance on what employees must do to meet them.
Among other things, FINRA’s Code of Conduct imposes restrictions on employees’ investments and requires financial disclosures that are uniquely related to our role as a securities regulator:
- FINRA employees cannot purchase or maintain any debt or equity interest in any broker-dealer or securities exchange operating in the U.S. (including any regulatory client of FINRA).
- FINRA employees cannot hold a debt or equity interest (i.e., bonds, notes or stock) in broker-dealers, or companies that have broker-dealer affiliates that contribute 10 percent or more of the company’s revenue net of interest expense, or paid regulatory fees to FINRA in the most recent calendar year that ranks them in the top 20 of all broker-dealers, even if its affiliates together contribute less than 10 percent of its revenue. For purposes of this subsection, the term “broker-dealer activities” includes the operation of a FINRA member firm.
All FINRA employees are subject to the 30-Day Trading Restriction policy. This policy prohibits the execution of opposite transactions within 30 days, and places restrictions on options trading. Unless a policy exclusion applies, this restriction applies to all accounts that require disclosure to FINRA, including accounts owned by a spouse or domestic partner. Additional information about the 30-Day Trading Restriction is available upon request.
If you believe that complying with these restrictions would raise concerns for an investment you have, please feel free to discuss your concerns during the interview process.
If you feel that your concerns have not been resolved, please advise your contact in the Human Resources Department that you need to speak with a member of the Code of Conduct staff. If you have questions about FINRA’s restrictions on employees’ investments you may also email [email protected] or call (202) 728-8262.
In certain limited situations, employees may receive a waiver of a particular provision of the Code of Conduct. For example, a new hire who would incur undue hardship if required to liquidate an impermissible investment upon joining FINRA may be allowed more time to dispose of the security, or allowed to hold the security for a specified period, if appropriate.
If such “hardship” issues apply to you, be sure to discuss them during the interview and negotiation process; this allows for the availability and terms of a possible waiver to be resolved before you accept FINRA employment.
Financial Privacy
In the normal course of business, financial institutions you do business with will request certain personal information – such as your name, Social Security number, address, income, and details about your assets. For example, you may need to provide this information when you fill out a loan application. Federal law provides consumer protections to safeguard your privacy and set standards for information sharing in these situations.
- Financial Privacy Basics
- Your Right to Opt-Out
- Additional Resources
Financial Privacy Basics
Federal law requires banks and other financial companies to provide their customers with privacy notices upon account opening and annually if any changes occur. The notice will contain information like:
- What personal financial information the company collects;
- Whether the company intends to share your personal financial information with other companies;
- What you can do to limit some of that sharing; and
- How the company protects your personal financial information.
In addition, if a financial company does not plan to share your information except as permitted by law, the notice will tell you this.
The privacy notice may be included as an insert with your monthly statement or bill or it may be sent to you in a separate mailing. If you agree to electronic delivery from an online financial company, the notice may be sent to you by email or it may be made available to you on the company’s website.
If you have more than one account with the same company, the company may send you only one privacy notice for all of your accounts or it may send you separate notices for each of your accounts.
If you have a joint account with another person (for example, a joint checking account or a mortgage loan), the financial company may send a notice to one of you or to each person listed on the account. If the company provides an opportunity to opt out, it must let one of the account holders opt out for all joint account holders.
If the company changes its privacy policy, it is required to send you a revised privacy notice.
Make sure you read all privacy notices you receive. If you have questions, reach out to the financial company.
Your Right to Opt-out
Federal privacy laws give you the right to stop (or “opt out” of) some sharing of your personal financial information. There are two categories of companies a financial company may share your information with:
- Affiliates, or members of the same corporate group, and
- Non-affiliates, or companies outside of the corporate group.
With respect to non-affiliates, there is certain information you cannot opt out of sharing. For example :
- Information that would be used to promote and market the financial company’s own products or products offered under a joint agreement between two financial companies;
- Records of your transactions–such as your loan payments, credit card or debit card purchases, and checking and savings account statements–to firms that provide data processing and mailing services for your company;
- Information about you in response to a court order; and
- Your payment history on loans and credit cards to credit bureaus.
You may be able to opt out of sharing certain information with affiliates. For example, if a company intends to provide an affiliate with personal information from your credit report or loan application, you will usually first be given a chance to opt out. However, the company can share information with affiliates when the information is based solely on your transactions with that company (transaction information includes whether you pay your bills on time, the type of accounts you have with the company, and so forth) without your express permission.
In some cases, your financial company may give you the choice to opt out of different types of sharing. For example, you could opt out of certain categories of information the company provides to other companies but allow the company to share other kinds of information.
If you do not opt out within a “reasonable period of time”–generally about 30 days after the company mails the notice– then the company is free to share certain personal financial information. However, you can decide to opt out of information sharing at any time. If you did not opt out the first time you received a privacy notice from a financial company, you can always change your mind and notify the company that you want to opt out at a later date. Contact your financial company and ask for instructions on how to opt out.
Remember, however, that any personal financial information that was shared before you opted out cannot be retrieved.
If you want to opt out of information sharing, you must follow the directions provided by your financial company. For example, you may have to call a toll-free number or fill out a form and return the form to the company.
Credit bureaus may also sell information about you to lenders and insurers who use the information to decide whether to send you unsolicited offers of credit or insurance. This is known as prescreening. You can opt out of receiving these prescreened offers by calling 1-888-567-8688.
Additional Resources
- Start the New Year in the Know – PDF
https://www.finra.org/careers/investment-and-securities-account-restrictions-under-finras-code-conducthttps://www.fdic.gov/consumer-resource-center/financial-privacy
