The Investment Dealers Association says its members should not try to silence complaining clients.

The IDA has issued a bulletin about the content of liability releases that brokerage firms may ask clients to sign. Firms usually ask clients to sign such a release when satisfying claims arising from complaints concerning client accounts and dealings with sales reps.

The IDA’s position is that releases shall not contain language requiring the client to keep the terms of the settlement agreement confidential, nor contain language which would prevent the client from disclosing to securities regulatory authorities, self regulatory organizations or other enforcement authorities the facts or terms of the settlement. Releases must also not contain any language that prevents a client from initiating a complaint.

The IDA says, “The lack of confidentiality is necessary to allow the client the ability to initiate a complaint to the securities regulatory authorities, self regulatory organizations or other enforcement authority whether or not a release has been signed, or to allow the client the ability to continue with any pending complaint already in progress, as well as to allow the client the ability to participate in any further proceedings.”

It notes that firms that do try to restrict confidentiality may face disciplinary action for “conduct unbecoming”.