Broker-Dealer

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On March 31 and April 1, the Financial Industry Regulatory Authority (FINRA) proposed rule changes that would extend the expiration date for temporary amendments that (1) provide relief to individuals functioning as a principal or operations professional, (2) provide relief to FINRA staff from certain enforcement and procedural requirements, and (3) allow virtual hearings.
Continue Reading FINRA Proposes Extension of Temporary COVID-19 Related Amendments

On April 7, the Financial Industry Regulatory Authority (FINRA) issued updated Supervision Frequently Asked Questions to clarify differences between the Rule 3120 Report and the Rule 3130 Report. FINRA also drafted a new Frequently Asked Question to address how member firms can change the date on which their Rule 3130 annual certification is due.
Continue Reading FINRA Updated and New Supervision FAQ for Rule 3120 and Rule 3120 Reports

On March 26, the Financial Industry Regulatory Authority (FINRA) published a notice encouraging employees of member firms and other interested persons to apply for upcoming vacancies on FINRA’s advisory and ad hoc committees. The Notice provides a general description of the responsibilities of each of FINRA’s advisory committees and some of FINRA’s ad hoc committees.
Continue Reading 2021 Advisory Committee Overview and Engagement Notice

On March 25, the Financial Industry Regulatory Authority (FINRA) issued a notice warning member firms that there appears to be an increase in new customers opening online brokerage accounts and engaging in Automated Clearing House (ACH) “instant funds” abuse to effect securities trading. Some firms provide individuals opening a brokerage account online with instant access to funds, allowing those customers to trade in their online accounts as soon as they enable ACH transactions, without having to wait for the payment to settle. FINRA has observed that the increase in misuse of instant funds is correlated with the recent market volatility driven by social media interest in certain securities.
Continue Reading FINRA Alerts Firms to Recent Increase in ACH “Instant Funds” Abuse

On March 24, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 21-13 (Notice) announcing updates to its interpretations regarding FINRA’s Margin Rule 4210(f)(8)(B)(ii) (Rule). The Rule provides (1) the numerical determination of when a customer is classified as a “pattern trader;” and (2) that if a member knows or has reasonable basis to believe that a customer will engage in pattern day trading, then the pattern day trading margin requirements of the rule will apply.
Continue Reading FINRA Announces Updates to the Interpretation on FINRA’s Margin Rule for Day Trading

On March 22, the Securities and Exchange Commission launched a new page on its website to bring together agency actions and the latest information about climate and environmental, social and governance (ESG) investing.
Continue Reading SEC Responds to Investor Demand by Bringing Together Agency Information About Climate and ESG Issues

On March 14, the Financial Industry Regulatory Authority (FINRA) published Regulatory Notice 21-11 (Notice), which seeks comment on proposed amendments to Rule 4210 (Margin Requirements) that would clarify and incorporate into the rule current interpretations regarding when issued and other extended settlement transactions and provide relief to facilitate the application of the rule to these transactions. Comments must be received by May 14.
Continue Reading FINRA Requests Comment on Proposed Amendments to Margin Rule 4210

On March 18, the Financial Industry Regulatory Authority (FINRA) published Regulatory Notice 21-12 (Notice), which reminds member firms of their obligations during extreme market conditions with respect to handling customer orders, maintaining appropriate margin requirements and effectively managing their liquidity.
Continue Reading FINRA Reminds Member Firms of Obligations for Customer Order Handling, Margin Requirements and Effective Liquidity Management Practices During Extreme Market Conditions