FINRA customer complaint rules
FINRA customer complaint rules govern how broker-dealers must handle written grievances from customers alleging misconduct. Firms must record each complaint, investigate it, keep the records for four years, and report complaint data to FINRA quarterly.
Under FINRA rules, a customer complaint is a written statement from a customer (or someone acting on the customer's behalf) alleging a grievance involving the firm or one of its associated persons — for example, unauthorized trading, misrepresentation, or theft of funds. The written requirement is the key trigger: emails, letters, and electronic messages count, while a purely verbal complaint does not create the same regulatory obligations, though firms are still expected to address it.
When a written complaint arrives, the firm must log it in a complaint file, investigate the allegation, and respond to the customer. Complaint records must be preserved for four years. Firms also report complaint information to FINRA each quarter under Rule 4530, and certain serious allegations — such as theft, forgery, or misappropriation — must be reported within 30 days of the firm learning of them.
Complaints matter beyond the individual dispute. Reported complaints can appear on a registered representative's Form U4 and public BrokerCheck record, and patterns of complaints alert FINRA examiners to potential sales-practice problems at a firm. Supervisors (principals) are responsible for reviewing and resolving complaints as part of the firm's supervisory system.
The SIE exam tests the basics of complaint handling: what qualifies as a complaint (written), how long complaint records are kept (four years), and the firm's duty to investigate and report. Expect a question distinguishing verbal gripes from reportable written complaints.
Key takeaways
- A FINRA-reportable customer complaint must be in writing, including emails and electronic messages.
- Firms must log, investigate, and respond to complaints, and keep the records for four years.
- Complaint data is reported to FINRA quarterly under Rule 4530; serious allegations like theft or forgery require reporting within 30 days.
- Complaints can appear on a representative's Form U4 and public BrokerCheck record.
- The SIE exam tests the written-complaint definition and the four-year retention period.