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FINRA Rule 3160

Governs networking arrangements where a broker-dealer provides securities services on or off the premises of a financial institution, such as a bank branch.

Rule Overview

Jurisdiction: United States

Regulator: FINRA

Topic: Consumer Protection

FINRA Rule 3160
Overview
Latest News
Further Reading

Firms offering broker-dealer services through a bank or other financial institution must:

  • Clearly distinguish brokerage services from the institution’s banking services.
  • Have a written networking agreement that outlines responsibilities, compensation, and regulatory access to records and premises.
  • Provide customers, at or before account opening, with disclosures that securities products:
    • are not FDIC insured;
    • are not bank deposits or guarantees; and
    • may lose value.
  • Provide these disclosures both in writing and orally for accounts opened on the financial institution’s premises.
  • Ensure confirmations, account statements, and most retail communications clearly identify the broker-dealer and include the required securities-risk disclosures.
  • Promptly notify the financial institution if a firm employee who also works for the institution is terminated for cause.

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Further Reading

Regulatory Notice 15-22, FINRA Requests Comment on a Revised Proposal to Adopt a Consolidated FINRA Rule Regarding Discretionary Accounts and Transactions Go to https://www.finra.org/rules-guidance/notices/15-22