Washington - The National Association of Securities Dealers has proposed an increase in the supervision of brokers who have a high number of client complaints.
The new mandates would specifically target securities brokers who have faced three or more complaints, three or more regulatory actions, or at least two internal reviews over a five-year period.
The organization said that a review of 663,000 brokers showed that, over five years, 2,751 had three or more complaints and arbitrations, 216 had faced three or more investigations and regulatory actions, and 1,198 had been terminated at least twice by their firms.
The proposal, approved by the NASD board and sent out for public comment, would require firms to investigate broker records for the last five years and identify repeat offenders. The firms would then have to develop heightened internal supervision plans.
