FINRA has delayed consideration of a highly contentious proposed rule on recruitment compensation disclosure.

The regulator was set to discuss the rule at the FINRA Board of Governors meeting on July 11. But “due to scheduling considerations, the item has been pushed to a later date,” FINRA spokesperson Nancy Condon said in an email. Condon had no additional information.

The proposal put forth by Regulatory Notice 13-02 seeks to address the potential conflicts of interest associated with recruitment compensation bonuses offered to advisors transitioning from one firm to the other. The rule “would require specific disclosure by the recruiting member firm of the financial incentives a representative receives as part of his or her relationship with the new firm,” a spokesperson said in an emailed statement.

In January, FINRA sought comments on the proposed rule, which elicited a thorough discussion among firms and industry trade groups.

Though the reason for the delay is unclear, recruiter Mindy Diamond of Diamond Consultants says it’s likely because the issue is complex and demands further discussion. “There was a lot of specificity that needed to be applied to the proposal and I think that’s why it’s been postponed because it’s an issue that requires a lot discussion,” Diamond says. “It’s not black and white, it’s not something that can be addressed in five minutes. And so they’re putting it off.”

Yet Diamond still expects the rule to eventually pass. “I think everybody expects that it will pass at some point, we’re just not sure when.”

The final proposal would require approval from FINRA’s Board of Governors before going before the SEC.

Paul McCaffrey and Mason Braswell contributed reporting.

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