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U.S. Securities and Exchange Commission

SEC Publishes Staff Study on Investor Access to Information About Investment Professionals


Washington, D.C., Jan. 27, 2011 — The Securities and Exchange Commission today announced that it has published a staff study recommending steps to help investors better access information about investment professionals.

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The recommendations of the study, which was required by Section 919B of the Dodd-Frank Wall Street Reform and Consumer Protection Act, must be implemented within 18 months after the study's completion.

Investors must currently search two separate databases for information about broker-dealers and investment advisers. The primary recommendation of the study is to enable investors to simultaneously search both databases using either FINRA's BrokerCheck website or the Investment Adviser Public Disclosure (IAPD) website and receive unified search results.

Other recommendations from the study include:

Expanding the search functions of BrokerCheck and IAPD to permit searches for broker-dealers, investment advisers, registered representatives, and investment adviser representatives, based on ZIP code or other indicator of location.
Enhancing BrokerCheck and IAPD by adding educational content, such as links and definitional material.

The study states that "the Commission and its staff have long maintained that investors should examine relevant registration information before choosing a broker-dealer or investment adviser. Information pertaining to a broker-dealer or investment adviser's federal or state registration, such as information about its associated persons, including licensing and other qualification data, disciplinary and employment history, contact information, and customer complaints, can help investors make better-educated decisions in selecting a broker-dealer or investment adviser, as well as better protect themselves against fraud."

According to the study, "a significant amount of registration data is publicly available" through the two databases. The study noted, "State securities regulators also act as an important source of registration information about broker-dealers, certain investment advisers, and their associated persons."

The study also recommended that "subsequent to the eighteen-month implementation period, Commission staff and FINRA continue to analyze, including through investor testing, the feasibility and advisability of expanding BrokerCheck to include information currently available in CRD (the Central Registration Depository), as well as the method and format of publishing that information; and that Commission staff continue to evaluate expanding IAPD content and the method and format of publishing that content, including through investor testing. Potential modifications could include adding summary data for advisory firms on IAPD, hyperlinks between CRD numbers and SEC file numbers containing information related to a particular CRD number, and additional links to content available elsewhere on BrokerCheck or IAPD."

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Modified: 01/27/2011