The Securities and Exchange Commission has granted accelerated approval of a Financial Industry Regulatory Authority proposal to adopt FINRA Rule 3110(e) concerning the responsibility of FINRA member firms to investigate applicants for registration.

The new rule seeks to clarify the language of National Association of Securities Dealers Rule 3010(e) relating to background investigations. In addition, FINRA Rule 3110(e) includes a new requirement for member firms to adopt and implement written procedures that are reasonably designed to verify the accuracy and completeness of the information contained in the applicant’s Form U4 no later than 30 calendar days after filing with FINRA. The new rule also requires member firms to adopt and implement written procedures that, at a minimum, provide for a national search of reasonably available public records to verify the accuracy and completeness of the information contained in the applicant’s Form U4. The requirement to conduct a public records search also must be satisfied no later than 30 calendar days after the initial or transfer Form U4 is filed with FINRA.

FINRA will announce the effective date of the new rule within 90 days of the SEC’s December 30, 2014 approval.

Click here for the SEC’s approval notice.