Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

Tag Archives: FINRA

FINRA Requests Comment on Proposed Pilot Program to Study Changes to Corporate Bond Block Trade Dissemination

Posted in Broker-Dealer
On April 12, the Financial Industry Regulatory Authority (FINRA) published a regulatory notice (the “Notice”) requesting comment on a proposed pilot program to study proposed changes regarding corporate bond block trade dissemination based upon recommendations by the Fixed Income Market Structure Advisory Committee (FIMSAC) of the Securities and Exchange Commission. The changes are aimed at… Continue Reading

SEC Approves FINRA Rule Change to Permit the Use of Electronic Signatures for Discretionary Accounts

Posted in Broker-Dealer
The Securities and Exchange Commission has approved a proposed rule change to amend Financial Industry Regulatory Authority (FINRA) Rule 4512 (Customer Account Information) (the “Amended Rule”). For discretionary accounts, member firms are currently required to maintain a record of the dated, manual signature of each named, natural person authorized to exercise discretion in such accounts.… Continue Reading

FINRA Proposes Rule Extending the Market-Wide Circuit Breakers in NMS Stocks Pilot Program

Posted in Broker-Dealer
On April 5, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change to extend the pilot program related to FINRA Rule 6121.02 (Market-wide Circuit Breakers in NMS Stocks), which provides a methodology for determining when to halt trading in all national market system stocks due to extraordinary market… Continue Reading

FINRA Proposes Rule to Adopt the Remaining Legacy NASD and Incorporated NYSE Rules as FINRA Rules

Posted in Broker-Dealer
On April 8, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change to adopt the remaining National Association of Securities Dealers (NASD) Rules and Incorporated NYSE Rules as FINRA Rules in the Consolidated FINRA Rulebook without any substantive changes. The rule change covers areas such as membership rules,… Continue Reading

FINRA Proposes Rule Extending the Pilot Program Related to Exchange-Listed Securities

Posted in Broker-Dealer
On April 5, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change to extend the pilot program related to FINRA Rule 11892 (Clearly Erroneous Transactions in Exchange-Listed Securities). In September 2010, the SEC approved, on a pilot basis, changes to the rule that, among other things: (i) provided… Continue Reading

FINRA Announces Updates of the Interpretations of Financial and Operational Rules

Posted in Broker-Dealer
On April 9, the Financial Industry Regulatory Authority issued Regulatory Notice 19-11 informing member firms that FINRA has updated its Interpretations of Financial and Operational Rules to add a new interpretation related to Rule 15c3-1(c)(2)(viii)(C)/06 of the Securities Exchange Act of 1934 (Open Contractual Commitments). The new interpretation relates to the conditions under which an underwriting… Continue Reading

FINRA Issues Regulatory Notice Regarding Departing Registered Representatives

Posted in Broker-Dealer
On April 5, the Financial Industry Regulatory Authority issued Regulatory Notice 19-10 addressing the responsibilities of member firms when communicating with customers about the departure of registered representatives who have direct contact with customers in the conduct of such member firm’s securities sales. The Notice reinforces two key expectations related to such communications. First, in… Continue Reading

FINRA Proposes Rule Addressing Regulation NMS and Extraordinary Market Volatility

Posted in Broker-Dealer
On April 11, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change to adopt FINRA Rules 6190 (Compliance with Regulation NMS Plan to Address Extraordinary Market Volatility) and 6121.01 (Resumption of Trading in Securities Subject to the Regulation NMS Plan to Address Extraordinary Market Volatility), which implement the… Continue Reading

FINRA Proposes Rule Making Substantive, Organizational and Terminology Changes to the Corporate Financing Rule

Posted in Broker-Dealer
On April 11, the Financial Industry Regulatory Authority filed with the Securities and Exchange Commission a proposed rule change to make certain substantive, organizational and terminology changes to FINRA Rule 5110 (Corporate Financing Rule – Underwriting Terms and Arrangements), which requires member firms that participate in a public offering to file documents and information with… Continue Reading

Nasdaq Proposes Rule Change to SEC to Assume Operational Responsibility for Certain Investigation and Enforcement Functions Currently Performed by FINRA

Posted in Broker-Dealer
On April 3, the Securities and Exchange Commission published a notice to solicit comments on Amendment No. 2 to a proposed rule change filed by the Nasdaq Stock Market LLC, pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934. The SEC also approved the proposed rule change, as modified by Amendment No. 2,… Continue Reading

FINRA Issues Guidance on FOCUS Reporting for Operating Leases

Posted in Broker-Dealer
On March 19, the Financial Industry Regulatory Authority, Inc. (FINRA) released Regulatory Notice 19-08 to provide guidance to members for reporting lease assets and liabilities on their FOCUS reports. FINRA’s notice follows an October 2018 No-Action Letter (the No-Action Letter) in which the staff of the Securities and Exchange Commission’s Division of Trading and Markets… Continue Reading

FINRA Reminds Firms of Obligations Under Rule 15c2-11(a)(4)

Posted in Broker-Dealer
On March 20, the Financial Industry Regulatory Authority, Inc. (FINRA) released Regulatory Notice 19-09, which reminds members of their obligations under Securities Exchange Act Rule 15c2-11 and FINRA Rule 6432 (Compliance with the Information Requirements of Rule 15c2-11). Rule 15c2-11 prohibits a broker-dealer from publishing (or submitting for publication) a quotation in an unlisted security… Continue Reading

FINRA Files Proposed Rule Change to CAB Rules Governing Qualification, Registration and Continuing Education of Associated Persons of CABs

Posted in Broker-Dealer
The Financial Industry Regulatory Authority (FINRA) is filing with the Securities and Exchange Commission a proposed rule change to amend the Capital Acquisition Broker (CAB) Rules governing the qualification, registration and continuing education of associated persons of CABs (CAB Rules 119-125). The proposed rule change reflects new consolidated FINRA qualification and registration rules and changes… Continue Reading

FINRA Requests Comment on Its Rule on Business Continuity Plans and Emergency Contact Information

Posted in Broker-Dealer
The Financial Industry Regulatory Authority (FINRA) recently released a regulatory notice requesting comment on the effectiveness and efficiency of Rule 4370 (Business Continuity Plans and Emergency Contact Information). The comment period expires April 26. Rule 4370 requires a member firm to create, maintain, annually review and update upon any material change a written business continuity… Continue Reading

Report from FINRA Board of Governors Meeting: Board Approves Rule Proposals, Engages with Boca Raton-Area Firms

Posted in Broker-Dealer
The Board of Governors of the Financial Industry Regulatory Authority (FINRA) met on February 28 and March 1 in Boca Raton, Florida, where it discussed the organization’s finances, reviewed several significant technology and other capital initiatives, and considered certain rulemaking items.… Continue Reading

FINRA Extends Deadline To Self-Report Violations Under 529 Plan Share Class Initiative

Posted in Broker-Dealer
The Financial Industry Regulatory Authority has extended the deadline for member firms to self-report violations under the 529 Plan Share Class Initiative to April 30. The extension will allow firms to have more time to review their supervisory systems and procedures with respect to their 529 plan transactions. A more detailed discussion of the Plan… Continue Reading

FINRA Working Paper Concludes High Broker-Affiliated ATS Order Routing is Associated with Lower Fill Rates, Higher Transaction Costs

Posted in Broker-Dealer
The Financial Industry Regulatory Authority’s Office of the Chief Economist has released a working paper (Study), maintaining that institutional orders routed by brokers that send a high percentage of such orders through affiliated alternative trading systems (ATSs) tend to receive lower order fill rates and higher execution costs. The Study examined order-handling information over the… Continue Reading

FINRA Issues Information Notice Regarding Suspicious Email Sent to Member Firms

Posted in Broker-Dealer
On February 13, the Financial Industry Regulatory Authority (FINRA) published an information notice alerting member firms about a suspicious email received by compliance personnel at a number of member firms. The email, sent by a purported BSA-AML compliance officer at a credit union, describes an attempted transfer of money from a firm client that the… Continue Reading

FINRA Issues Regulatory Notice on Effective Date Extension of Margin Requirements for Covered Agency Transactions

Posted in Broker-Dealer
On February 12, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 19-05 (Notice) informing member firms that the effective date for the implementation of the amendments to FINRA Rule 4210 has been postponed. The amendments, which will establish mandatory margin requirements for certain covered agency transactions, will go into effect on March 25, 2020… Continue Reading

FINRA Releases 2019 Annual Risk Monitoring and Examination Priorities Letter

Posted in Broker-Dealer, Digital Assets and Virtual Currencies
On January 22, the Financial Industry Regulatory Authority (FINRA) issued its annual Risk Monitoring and Examination Priorities Letter. This year’s letter includes a number of new areas for firms to consider in seeking to improve their compliance, supervisory and risk management programs.… Continue Reading

FINRA Issues Regulatory Notice Regarding Updates to Supplemental Statement of Income

Posted in Broker-Dealer
On January 8, the Financial Industry Regulatory Authority issued a Notice advising its members of updates to the Supplemental Statement of Income (SSOI). The updates are designed to conform with amendments adopted by the Securities and Exchange Commission that simplify and update certain FOCUS reporting requirements applicable to broker-dealers. Pursuant to FINRA Rule 4524, the… Continue Reading

FINRA Issues Notice Related to Reporting Requirements for Auction Transactions

Posted in Broker-Dealer
On January 9, the Financial Industry Regulatory Authority issued a Notice to remind its members that they should not report auction transactions in US Treasury securities—including auction awards to either direct or indirect bidders—to the Trade Reporting and Compliance Engine (TRACE), as these transactions are excluded from the TRACE reporting requirements under FINRA Rule 6730(e)(8).… Continue Reading

FINRA Files Proposed Rule Change Regarding Arbitration Subpoenas, Orders of Appearance of Witnesses and Production of Documents

Posted in Broker-Dealer
On December 20, the Financial Industry Regulatory Authority filed a proposed rule change with the Securities and Exchange Commission to amend various FINRA Code of Arbitration Procedure Rules that govern objections in arbitration proceedings to subpoenas, orders of appearance of witnesses and production of documents by non-parties. Since non-parties to a FINRA arbitration do not… Continue Reading