Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Securities Regulation topic
No spam. Unsubscribe anytime.
Lawmakers press department on biometric ID.me tie to FINRA as securities rules move forward
Summary
The committee approved securities rule changes that restructure registration chapters and raise net-capital thresholds, while lawmakers pressed Department of Commerce and Insurance staff over whether requiring FINRA membership materials forces advisers into FINRA's ID.me biometric process.
The Department of Commerce and Insurance presented a broad securities rule package July 15 that reorganizes securities chapters, extends qualification timelines for professionals leaving firms, raises minimum net capital requirements for some broker-dealers and adjusts conflict-of-interest and custody rules for investment advisers.
Representative Renaud asked whether the rules’ new requirement to submit a copy of an applicant's FINRA membership agreement would force advisers to use FINRA’s ID.me process and thereby surrender biometric data. Jacob Strait, associate counsel, and April Odom, director of registration for the securities division, said FINRA membership is optional for some broker-dealers and that the membership agreement itself does not necessarily contain biometric data; however, they acknowledged that FINRA and its systems use ID.me for access and that certain filings can require ID.me verification.
"One of the things my constituent is concerned about is that by requiring the FINRA membership agreement as part of these rules ... it is by default requiring them to comply with that biometric information," Representative Renaud said. Department staff offered to connect the constituent with division staff to clarify options and identify non‑FINRA alternatives where applicable.
The package also increases minimum net capital for non‑FINRA broker-dealers to $100,000 and raises net-capital standards for investment adviser firms with or without custody responsibilities. The rules add a prohibition on failing to pay unpaid arbitration awards as a business practice and create exemptions and clarifications around custody definitions and surprise-audit requirements for investment advisers.
The committee gave the securities package a positive recommendation after discussion; a senate roll call recorded six ayes and the House voice vote passed it with no recorded opposition. Department staff and a representative agreed to follow up with the constituent about alternative registration paths that do not require FINRA/ID.me.
