FINRA Issues

On May 26, 2010, FINRA Published Regulatory Notice 10-25 seeking comments on its proposal to expand FINRA’s registration requirements to include individuals who are engaged in, or supervising, activities relating to sales and trading support, and that handle customer assets. On June 30, 2010, FSI submitted a comment letter in response to this Regulatory Notice.

FINRA has released a rule proposal to expand its registration requirements to include individuals who are engaged in, or supervise activities relating to sales and trading support, and who handle customer assets. The Proposed Rule could have important implications for independent broker-dealers, and the individuals who work in the broker-dealers' back offices by requiring each "covered person" to register as an Operations Professional, take an examination, and meet continuing education requirements.

FSI is pleased to endorse Mari Buechner, 2010 chair of the FSI Board of Directors, for a two-year small firm seat on the FINRA Board of Governors. In addition, FSI has endorsed Lisa Roth for a three-year small firm seat.

FINRA has released a rule proposal to expand its registration requirements to include individuals who are engaged in, or supervising, activities relating to sales and trading support, and that handle customer assets.

The annual meeting of FINRA firms will take place on or about Monday, August 2, 2010, to elect individuals to fill the seven Elected Governor seats on the FINRA Board of Governors. There are three Small Firm Governor seats, one Mid-Size Firm Governor seat, and three Large Firm Governor seats up for election.

On September 8, 2009, FSI submitted a comment letter supporting FINRA’s proposal to streamline the requirements of the bank broker-dealer rule. The proposal was designed to ensure uniformity between FINRA requirements and the relevant provisions of the Gramm-Leach Bliley Act of 1999 (GLB) and Regulation R.

The Proposed Rules are intended to streamline the standards of review for new and continuing membership applications (CMA), clarify certain administrative aspects of the Membership Application Process (MAP), update or eliminate outdated terminology, require certain additional information about the applicant, and incorporate certain provisions from the Incorporated NYSE membership rules.

On September 21, 2009, FINRA published Regulatory Notice 09-55 seeking comments on its proposal to rework its rules governing communications with the public (Proposed Rule). The Proposed Rule seeks to streamline the existing advertising rules by reducing the number of communications categories from six to three. 

On June 17, 2009, FINRA published Regulatory Notice 09-34 seeking comment on its proposal to incorporate and replace NASD Rule 2830 regarding the distribution and sale of investment company securities with new FINRA Rule 2341. The proposed rule would require firms to make new disclosures to investors regarding the receipt of cash compensation in connection with the sale of investment company securities.

The Financial Services Institute and the Financial Services Roundtable have sent a joint letter to FINRA expressing concerns with certain aspects of recent FINRA television and radio ads. The main focus of FINRA’s new ads appears to be to inform investors of FINRA’s existence and role in protecting investors.

As part of FINRA’s ongoing rulebook consolidation process, FINRA proposed a new rule last year to prevent the dissemination of rumors intended to manipulate stock prices. The proposal combines aspects of FINRA Rule 6140 and Incorporated NYSE Rule 435(5) and extends the prohibitions on the origination and circulation of rumors to cover all securities.

A FINRA proposal that amends the principal review requirements of FINRA Rule 2821, commonly known as the Variable Annuity rule, has been approved by the SEC. The approved amendments benefit financial advisors and broker-dealer firms by modifying the starting point for the seven-business-day principal review period from the date the client signed the application to the date the firm's OSJ receives the application.

On January 6, 2009, FINRA requested comment on a proposal relating to information and data reporting and filing requirements. The proposed rule is intended to establish a new information reporting requirement; require broker-dealer firms to report additional applicable contact information; and consolidate, streamline, and modify into one rule several separate reporting and filing requirements. 

Mari J. Buechner, President & CEO of Coordinated Capital Securities in Madison, Wisconsin, has been elected by FINRA’s small firm members to the vacant Small Firm seat on the FINRA Board of Governors.  FSI strongly endorsed Mari’s nomination for the open seat and concurs with the judgment of her industry peers that she will be a strong and credible advocate for small firms.

The SEC approved FINRA’s proposed amendment to NASD Rules 2210 and 2211 which allows financial advisors and firms to distribute market letters to retail customers without prior approval by a registered principal.

FSI is pleased to announce that all 36 FSI members that were selected as nominees by FINRA District Nominating Committees were elected in their districts.  Last February, FSI members responded in record numbers to our call to action by submitting over 90 nominees for service on one of the 11 FINRA District Committees.