Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

Tag Archives: FINRA

FINRA Issues Regulatory Notice Regarding Extension of Time Requests Relating to FINRA Rule 4210

Posted in Broker-Dealer
On February 14, the Financial Industry Regulatory Authority (FINRA) published a Regulatory Notice stating that it is updating the Regulatory Extension (REX) system to include increased functionality that will assist FINRA member firms in requesting extensions of time related to FINRA Rule 4210. This will include requests for extensions of time in connection with the… Continue Reading

SEC Announces Examination Priorities for 2018

Posted in Broker-Dealer, SEC/Corporate
The Office of Compliance Inspections and Examinations (OCIE) of the Securities and Exchange Commission has announced its examination priorities for 2018. This year, the OCIE’s examination priorities fall within the following categories: examining compliance and risks in critical market infrastructures; protecting retail investors, including seniors and those saving for retirement; continuing oversight over the Financial… Continue Reading

FINRA Requests Comment on Rules Applicable to Government Securities

Posted in Broker-Dealer
The Financial Industry Regulatory Authority (FINRA) is requesting comment on the applicability of various FINRA rules to government securities. After undertaking a review of its rulebook, FINRA has identified several rules that currently exclude or do not clearly apply to US Treasury securities or other government securities. FINRA has determined that the application of these… Continue Reading

FINRA Proposes Rule Change To Provide Additional Hearing Options for Parties in Certain Arbitrations

Posted in Broker-Dealer
On January 30, the Financial Industry Regulatory Authority filed a proposed rule change with the Securities and Exchange Commission to adopt amendments to FINRA Rules 12600 and 12800 of the Code of Arbitration Procedures for Customer Disputes (Customer Code) and FINRA Rules 13600 and 13800 of the Code of Arbitration Procedure for Industry Disputes (Industry… Continue Reading

FINRA Proposes Rule Change Related to the Content of the Securities Industry Essentials Examination

Posted in Broker-Dealer
On January 12, the Financial Industry Regulatory Authority (FINRA) filed with the Securities and Exchange Commission a proposed rule change outlining the content and selection specifications for FINRA’s new general knowledge examination, the Securities Industry Essentials Examination (SIE) (For additional information related to the SIE, please see the July 14, 2017 edition of the Corporate… Continue Reading

FINRA Requests Comment on Proposed Amendments to FINRA Rule 4521 and New Supplemental Liquidity Schedule

Posted in Broker-Dealer
On January 8, the Financial Industry Regulatory Authority (FINRA) requested comment on proposed amendments to FINRA Rule 4521. Currently, Rule 4521(c) requires each carrying or clearing firm to notify FINRA after tentative net capital has declined 20 percent or more from the amount reported on the most recent Financial and Operational Combined Uniform Single (FOCUS)… Continue Reading

FINRA Releases 2018 Regulatory and Examination Priority Letter

Posted in Broker-Dealer
On January 8, the Financial Industry Regulatory Authority (FINRA) released its annual Regulatory and Examination Priority Letter detailing various issues that will be the subject of particular regulatory focus and scrutiny this year. Many of the areas noted are carry-overs from previous years, including the protection of senior investors and other retail customers, new product… Continue Reading

FINRA Proposes To Extend the Expiration Date of FINRA Rule 0180

Posted in Broker-Dealer
On January 3, the Financial Industry Regulatory Authority proposed a rule change to extend the expiration date of FINRA Rule 0180 (Application of Rules to Security-Based Swaps) to February 12, 2019. FINRA Rule 0180 temporarily limits the application of certain FINRA rules with regard to security-based swaps. The rule was originally designed to avoid disruptions… Continue Reading

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