Pending approval by the Securities and Exchange Commission, the Financial Industry Regulatory Authority will enact a rule change that requires members to include a direct link to its BrokerCheck service on their Websites and any associated social media sites.

FINRA established BrokerCheck in 1988 (then known as the Public Disclosure Program) to provide investors with information on the professional background, business practices, and conduct of member firms and their brokers. The reports are derived from the Central Registration Depository, the securities industry's online registration and licensing database. Among the disclosures are regulatory complaints, proceedings, and investigations; pending civil litigation; pending arbitration or civil litigation; and investment-related, consumer-initiated complaints.

The information, however, isn't well utilized by most investors. A 2009 study by FINRA found that only 15% of respondents who had used a financial services provider in the previous five years checked the background, registration, or license of a financial services provider.

FINRA and the SEC have long sought ways to improve awareness of the service, a goal also demanded of them by the Dodd-Frank Act. A study conducted by the SEC in 2011, as part of that legislative mandate, further illustrated the problems with it. Many of the participants in focus groups assembled for the study said they were unaware of the existence of BrokerCheck prior to their participation. Among the suggestions that grew out of that study, and were later implemented, were adding the ability to search by location or ZIP code, rather than having to know the full name of a firm or broker.

The latest proposal has again amplified the concerns expressed by critics of BrokerCheck. Among the issues expressed in comment letters to FINRA and the SEC are that the disclosure of test scores can be misleading, as they don't detail the subject matter included on those exams or explain the relevance of the scores.

Another concern is the required inclusion of customer complaints within 30 days of filing, even though numerous complaints are eventually dismissed after an internal investigation, settled, or can languish in arbitration. This may prevent exculpatory materials from appearing in a timely manner. A similar issue is that Wells Notices also remain on the site until resolved, which is of little comfort when the outcome is eventually favorable to a firm.

A regulatory notice regarding the proposed rule change has been published in the Federal Register and the SEC is in the midst of a comment period that ends on Feb. 15.

According to its 2012 year-end tally, FINRA oversees approximately 630,000 registered brokers and 4,289 member firms. It will announce the effective date of the rule change in a notice that will be published no later than 60 days following SEC approval.