FINRA’s Board of Governors will finally consider its controversial plan to require transitioning advisors to disclose recruitment incentives.

After postponing discussion on the plan in July, the regulator has added consideration of an “updated proposal” to its September 19 agenda, according to a posting on its website. If eventually enacted, the FINRA rule would "require disclosure of compensation a registered representative receives in connection with changing firms and other important considerations for a customer deciding whether to follow the representative to a new firm."

FINRA declined to add any additional clarification around what had been updated.

The original version, Regulatory Notice 13-02, was put out for comment in January. It sought to force advisors who are switching firms to disclose to clients any upfront bonuses and other incentive offers they receive that are greater than $50,000. FINRA said it was designed to help clients understand the reasons behind their advisors' decision to move.

The notice, which was out for comment until March 5, has divided the industry. A number of large brokerage firms commented in favor of the proposal saying that it would increase transparency. Others, including industry trade groups, have voiced concerns over whether the policy of requiring an advisor to disclose income constitutes an invasion of privacy or could unfairly bias a client against moving with the advisor.

In July, a spokeswoman for the regulator said that the discussion was postponed because of “scheduling issues.”

At the time, Mindy Diamond of the career-consulting firm Diamond Consultants speculated that the delay was because of the intricacy and nuances of the proposal. Many firms questioned specific aspects of the proposal, such as the threshold for disclosure. Others, such as Wedbush, said that the regulator should limit all recruiting compensation to no more than $100,000. 

FINRA’s Board of Governors will be considering whether to send the proposal to the SEC for final approval. As outlined in the Securities Exchange Act of 1934, proposed rules from self-regulatory organizations must be submitted to the SEC where they will be subject to another public comment period. The SEC will then review the proposal and decide whether to approve a final version for FINRA to begin enforcing.