Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

Tag Archives: FINRA

FINRA Requests Further Comments on the Effectiveness and Efficiency of Its Payments for Market Making Rule

Posted in Broker-Dealer
On November 28, as part a retrospective rule review, the Financial Industry Regulatory Authority (FINRA) requested comments on Rule 5250 (payments for market makers). FINRA’s retrospective rule review process examines significant rulemaking to determine whether the FINRA rule or rule set is meeting its intended objectives by reasonably efficient means and, as necessary, make any… Continue Reading

FINRA Releases Report on FINRA Examination Findings

Posted in Broker-Dealer
On December 6, the Financial Industry Regulatory Authority (FINRA) released a summary of findings from its examinations of broker-dealers (Summary Report). As part of FINRA’s mission of investor protection and market integrity, FINRA conducts regular examinations of its broker-dealer members, with each broker-dealer being examined at least once every four years. FINRA prepares a report—which… Continue Reading

FINRA Releases New Targeted Exam Letter Regarding Order Routing Conflicts

Posted in Broker-Dealer
On November 10, the Financial Industry Regulatory Authority released the contents of a new Order Routing Conflicts targeted exam letter that certain member firms may receive. FINRA uses targeted exams (e.g., sweeps) to gather information on emerging issues and uses such information to pinpoint regulatory response to such issues. FINRA chooses the identity of member… Continue Reading

FINRA Requests Comment on Proposal to Amend Rule 3110, to Provide Firms the Option to Conduct Remote Inspection of Offices and Locations That Meet Specified Criteria

Posted in Broker-Dealer
On November 13, the Financial Industry Regulatory Authority requested comment on a proposed rule that would allow member firms to conduct remote inspections of certain “qualifying offices,” in lieu of a physical, on-site inspection. The proposal would allow member firms to adopt policies and procedures to determine whether a given location could be deemed a… Continue Reading

FINRA Releases a Regulatory Notice That the SEC Approved the CAT Fee Dispute Resolution Process

Posted in Broker-Dealer
On November 15, the Financial Industry Regulatory Authority issued a Regulatory Notice concerning the Securities and Exchange Commission’s approval of SEC Rule 6898 (Consolidated Audit Trail (CAT) Fee Dispute Resolution). The new rule establishes a procedure under which an industry member that disputes a CAT fee must file a written application with the CAT NMS,… Continue Reading

FINRA Releases Summary of Phase 1 Changes to FINRA Advisory Committees Under FINRA360

Posted in Broker-Dealer
On November 15, the Financial Industry Regulatory Authority released an update on actions it has thus far taken under the “FINRA360” initiative, which is an ongoing comprehensive review of FINRA’s operations. As of November 13, these actions include: 1) replacing the Technology Advisory Committee with an annual “CIO Summit”; 2) broadening the authority of the… Continue Reading

SEC Approves a Longer Period to Review Fees for the Consolidated Audit Trail

Posted in Broker-Dealer
Earlier this year, several exchanges and the Financial Industry Regulatory Authority filed proposed rule changes to adopt industry member fees that would fund the consolidated audit trail (CAT). The proposed rule changes were immediately effective upon filing with the Securities and Exchange Commission. However, on June 30, the SEC temporarily suspended the rules and initiated… Continue Reading

FINRA Releases Notice to Members Addressing “Pay-to-Play” Rule for Capital Acquisition Brokers

Posted in Broker-Dealer
On November 6, the Financial Industry Regulatory Authority (FINRA) released Notice to Members 17-37, which provides information about the Pay-to-Play rule applicable to capital acquisition brokers (CABs). The SEC’s pay-to-play rules prohibit an investment adviser and its covered associates from providing or agreeing to provide payment to any person to solicit a government entity for… Continue Reading

FINRA Publishes Regulatory Notice Regarding Sales Practice Obligations for Volatility-Linked Exchange-Traded Products

Posted in Broker-Dealer
On October 16, the Financial Industry Regulatory Authority (FINRA) published Regulatory Notice 17-32 (Notice), which reminds FINRA member firms of their sale practice obligations related to the sale of volatility-linked exchange-traded products (ETPs), which are designed to track Chicago Board Options Exchange Volatility Index (VIX) futures. Based on the high likelihood that such instruments may… Continue Reading

SEC Approves FINRA Registration, Qualification and Continuing Education Rules

Posted in Broker-Dealer
The Securities and Exchange Commission has approved the Financial Industry Regulatory Authority rules that (1) consolidate the National Association of Securities Dealers (NASD) and Incorporated New York Stock Exchange registration rules, as well as existing FINRA rules; (2) restructure the representative-level qualification examination requirements; and (3) amend continuing education requirements. The rules will become effective… Continue Reading

FINRA Board of Governors Authorizes Rule Proposals at September Meeting

Posted in Broker-Dealer
Last week, the Financial Industry Regulatory Authority Board of Governors (Board) had its September meeting. Among other things, the Board approved the publication of two rule proposals. In particular, the Board authorized the publication of a proposed rule that would allow firms to use technology to conduct remote inspections of certain qualifying offices that have… Continue Reading

SEC Approves FINRA Rule Change to Subject Capital Acquisition Brokers to Pay-to-Play Rules

Posted in Broker-Dealer
On September 29, the Securities and Exchange Commission approved the rule proposal of the Financial Industry Regulatory Authority to subject capital acquisition brokers (CABs) to the same pay-to-play restrictions already applicable to non-CAB member firms. As explained in more detail in this Katten advisory, CABs are FINRA members that are engaged in a limited range… Continue Reading

FINRA Delays Rule 4210 Margining of Covered Agency Transactions to June 2018

Posted in Broker-Dealer
On September 19, the Financial Industry Regulatory Authority (FINRA) took action to delay until June 25, 2018, the implementation of margin requirements for Covered Agency Transactions under FINRA Rule 4210. As defined in the amendments to FINRA Rule 4210, adopted in 2016, Covered Agency Transactions include (1) To Be Announced (TBA) transactions, inclusive of adjustable… Continue Reading

FINRA Proposes Rule Change to Subject Capital Acquisition Brokers to Pay-to-Play Rules

Posted in Broker-Dealer
On August 17, the Financial Industry Regulatory Authority (FINRA) proposed rule amendments to apply its established “pay-to-play” rules to capital acquisition brokers (CABs) that engage in distribution to, or solicitation of, government entities on behalf of investment advisers for compensation. CABs are FINRA members that are engaged in a limited range of broker-dealer activities, such… Continue Reading

FINRA and SIPC Agree To Streamline the Annual Report Filing Process for Broker-Dealers

Posted in Broker-Dealer
On August 1, the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation (SIPC) announced a services agreement designed to streamline the annual report filing process for member firms. Effective September 1, member firms that currently file separate annual reports with SIPC and FINRA will be able to make a single filing using FINRA’s… Continue Reading

OCC Seeks Volcker Rule Comments

Posted in Banking
On August 2, the Office of the Comptroller of the Currency provided further evidence that change may be forthcoming for banks subject to the Volcker Rule (Section 13 of the Bank Holding Company Act of 1956) by issuing a notice soliciting suggestions and recommendations for revising the regulations implementing the Volcker Rule to better accomplish… Continue Reading

FINRA Releases Additional Guidance With Respect To Enhanced Disclosure Requirements for Corporate and Agency Debt Securities Transactions

Posted in Broker-Dealer
The Financial Industry Regulatory Authority, Inc. has released frequently asked questions (FAQs) related to the enhanced confirmation disclosure requirements for certain corporate and agency debt securities transactions pursuant to recently approved amendments to FINRA Rule 2232. The new requirements obligate FINRA members to disclose additional transaction-related information to retail customers for trades in corporate or… Continue Reading

Proposed Rule Change Relating To Revisions To the Definition of Non-public Arbitrator

Posted in Broker-Dealer
On July 11, the Financial Industry Regulatory Authority filed a proposed rule amendment to change the definition of a non-public arbitrator under the Code of Arbitration Procedure for Customer Disputes and the Code of Arbitration Procedure for Industry Disputes (collectively, the Codes), to a person who is otherwise qualified to serve as an arbitrator, and… Continue Reading

SEC’s Recent Order Approving FINRA Rule Change Relating To Qualification and Registration Requirements

Posted in Broker-Dealer
On July 7, the Securities and Exchange Commission issued an order adopting the Financial Industry Regulatory Authority’s proposed rule amending the qualification and registration requirements for associated persons. The new rule restructures the current qualification examinations, creates a general knowledge examination called Securities Industry Essentials (SIE) and specialized knowledge examinations, and revises the continuing education… Continue Reading

FINRA Proposes Rule Change to Extend the Implementation of Margin Requirements for Credit Default Swaps

Posted in Broker-Dealer
On June 14, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change extending to July 18, 2018, the interim pilot program with respect to margin requirements for certain credit default swaps. The interim pilot program, which was implemented by FINRA Rule 4240, had been set to expire on… Continue Reading

FINRA Proposes Rule Change Regarding Trade Modifiers and the Reporting of Transactions in US Treasury Securities

Posted in Broker-Dealer
On June 12, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change establishing February 5, 2018, as the date when member firms must begin using new transaction modifiers in connection with reporting transactions in certain US Treasury securities. In October 2016 the SEC approved changes to the FINRA… Continue Reading