Broker-dealer firms that have elected to participate in FINRA’s 529 Plan Share Class Initiative must submit their confirmation of eligibility to FINRA by Friday, May 31st. Confirmation of eligibility is to be submitted via email to firstname.lastname@example.org and must include the additional information specified on page four of Regulatory Notice 19-04. Firms may request an extension of time to provide additional information by emailing 529Initiative@finra.org.
Susan Schroeder, EVP of Enforcement, stressed that this is a voluntary initiative. When deciding whether to self-report, firms should ask whether they have the information needed to supervise these transactions and whether their brokers are properly trained to make appropriate share class recommendations. If a firm identifies deficiencies in its supervisory procedures related to 529 Plan share class recommendations, even if there has been no impact to clients, the firm is encouraged to self-report to FINRA the corrective measures being taken to strengthen supervision in this area.
To assist you with assessing the quality of your supervisory procedures, Hardin has created a checklist of factors to consider. Contributed by Rochelle A. Truzzi, Senior Compliance Consultant