United States: As The Summer Wound Down … FINRA Amended The "Publicity Rule" (Rule 8313) And Discussed Best Practices In Business Continuity Plans

In the past few weeks, FINRA published several Regulatory Notices, two of which should be of interest to all broker-dealers. Regulatory Notice 13-27 discusses recently approved amendments to the oddly named "Publicity Rule" concerning release of FINRA disciplinary complaints and decisions, statutory disqualification decisions, and other information. Regulatory Notice 13-25 is a joint advisory issued with the Securities and Exchange Commission ("SEC") and the Commodity Futures Trading Commission ("CFTC"), discussing business continuity plans and "best practices and lessons learned" following the wide disruption to the markets caused by Hurricane Sandy in October 2012.

The Publicity Rule

FINRA has amended Rule 8313 (the "Publicity Rule") to increase transparency into the FINRA decision-making process and to provide additional guidance to member firms in their compliance efforts. Among other things, the amended Rule aligns FINRA's periodic publication of disciplinary information with the information already publicly available on BrokerCheck and with the SEC's practice of disclosing information on its website. The amendments take effect on December 16, 2013.1 

Disciplinary Actions and Complaints

The amendments to Rule 8313 eliminate the disclosure thresholds that previously limited disclosure of disciplinary actions to those resulting in sanctions over $10,000. Once the amendments become effective, all disciplinary complaints and decisions will be released in unredacted form, regardless of the size of the sanction, subject to limited exceptions at the discretion of FINRA and its staff, as described below. In addition, the removal of dollar thresholds will allow FINRA to notify its membership and the press when any disciplinary decision has been appealed to the SEC, including information regarding whether sanctions have been stayed during the appeal. These changes are intended to provide firms with greater access to information when evaluating their own compliance concerns and educating their associated persons, and also to better inform firms that are facing allegations of rule violations about existing disciplinary actions (for instance, the underlying facts and sanctions imposed). FINRA notes that these changes to Rule 8313 are less significant than they might have been in years past because disciplinary information now is publicly available on BrokerCheck, even when the decisions themselves are not published.

The amendments also clarify that when FINRA has published a disciplinary complaint that subsequently is dismissed or withdrawn, FINRA will publish with the complaint the order dismissing or withdrawing the complaint. FINRA states that this is consistent with the SEC's practice.

Other Amendments of Note

The amended Publicity Rule provides for the release of unredacted copies of, among other things, statutory disqualification decisions and notifications, including the identities of the statutorily disqualified individuals or member firms. This is a marked change from current FINRA rules that provide for the release of redacted versions of these materials.

The changes also address the release of expedited proceeding decisions for certain types of misconduct, like the failure to pay fees or meet eligibility requirements, and summary actions for failure to pay fines or monetary sanctions. The amendments consolidate the publication standards for these decisions and codify the current FINRA practice of releasing decisions relating to summary suspensions or expulsions for failure to pay fines. While these rule changes do not change FINRA practice, they update the Publicity Rule to comport with existing practice.

Publication of decisions from Membership and Continuing Membership Application appeals to the National Adjudicatory Council and FINRA board will now be governed by the Publicity Rule. These generally will continue to be published in redacted form, although the National Adjudicatory Council and the FINRA Board both will have the authority to direct the publication of unredacted appeals decisions.

In addition, the amendments permit the release of exemption decisions and "any other decision," although there is no requirement to publish them.

Rule 8313, as amended, includes a new provision that permits FINRA, notwithstanding the general inclination towards publication of unredacted materials, to redact information, on a case-by-case basis, if there are personal safety or privacy concerns that outweigh the investor protection concerns that the Publicity Rule generally supports. Therefore, materials that contain confidential customer information, or that might raise significant risk of identity theft or concerns about personal safety or privacy, may be redacted. This is consistent with FINRA's current approach in releasing information in BrokerCheck.

Business Continuity Planning

Regulatory Notice 13-25 (the "Joint Notice"), is a joint advisory issued with the SEC and CFTC regarding business continuity plans ("BCP"). The considerations that are presented in this notice are based on conversations between the regulators and leading market participants regarding how the firms executed their BCPs in the aftermath of Hurricane Sandy.2 

The following is a list of the major topics that the Notice encourages FINRA member firms to consider in evaluating their BCPs.

Widespread Disruption Considerations:

  • The possibility of a widespread lack of critical utilities (i.e., telecom, transportation, electricity), office space, fuel and water, with consideration of redundancy services and the proximity of vendors for these services to the area affected by a potential BCP event.
  • The extent to which a BCP is dependent on remote access and services necessary for employees to work remotely during a crisis event; because remote access relies heavily on fully functional telephone and internet service, firms should also evaluate alternatives that do not require fully functional telecommunications systems for key control functions such as compliance, risk management, back office operations, and financial and regulatory reporting.

Alternative Locations Considerations:

  • Whether primary sites and alternative locations such as back-up data centers and operations sites rely on the same critical utility services, and whether alternative locations should be located in a different geographic area.
  • The accessibility of, and staff's familiarity with, alternative locations, and the ability of staff to travel to such locations when transit and lodging options may be impacted.
  • The appropriate number of staff and amount of space at alternative locations necessary to perform critical activities, such as risk functions, control functions, finance and treasury activities, and the appointment of designated supervisors of BCP functions.
  • The adequacy of operational and logistical requirements (for example, backup generator capacity) to supply critical functions and users.
  • The availability of BCPs, contact lists and other necessary documents, procedures and manuals at alternative locations, ideally in paper form, in the event that electronic files cannot be accessed.
  • The ability to pre-arrange reserved space at remote locations, including hotels, and transit for key personnel, as well as whether to move critical staff in advance of a significant BCP event.

Vendor Relationship Considerations:

  • Whether vendors that provide critical services or supplies (for example, clearance and settlement, banking and finance, trading support, fuel, telecommunications, electricity and other utilities) have their own BCPs and whether those BCPs are adequate.

Telecommunications Services and Technology Considerations:

  • The adequacy of relying on a single telecommunications service provider, and the possible need to contract with multiple telecommunications carriers to provide a failover to a different carrier, if necessary, to maintain fax, voice mail, and landline and VoIP services.
  • Whether there are mechanisms and processes to provide customers, trading counterparties, and regulators with updated contact information if alternate telephone lines must be used.

Communication Plans Considerations:

  • Providing customers and trading counterparties with contact information, and keeping the firm's website updated to include operational status and general contact information.
  • Establishing relationships with multiple broker-dealers to facilitate alternative market entry points.
  • Implementing a communication plan that allows firms to better communicate and coordinate with regulators, exchanges, emergency officials and other firms, with focus on reducing the likelihood of inconsistent communications.
  • Establishing a centralized process for accounting for all firm staff members, and frequently updating emergency contact lists with relevant firm staff members.
  • Adopting diverse methods of communication with staff, particularly critical staff, including providing them with multiple communications devices on multiple carriers, if necessary.

Regulatory and Compliance Considerations:

  • Remaining aware of time-sensitive regulatory requirements that coincide with a potential BCP event.
  • Updating BCPs to include new regulatory and SRO requirements.

Review and Testing Considerations:

  • Conducting full BCP tests and participating in industry testing, at least annually, but more frequently if changes to the plan or to the business are made.
  • Conducting annual or more frequent BCP training to familiarize all personnel with the plan and any critical roles they have been pre-assigned in carrying out the BCP.
  • Incorporating stress tests into the firms' BCPs (for example, performing a stress test on the firm's liquidity position and reviewing the level of excess customer reserves, to be better prepared to adjust liquidity or excess reserves prior to an event).

The Joint Notice does not suggest that any of the firms contacted had inadequate BCPs or that the regulators identified any particular problems with firms' actions to address the impact of the storm. That said, having provided this new guidance based on the first-hand experiences afforded by Hurricane Sandy, such as fuel shortages, telecommunications down from multiple carriers, transportation snarls, and both New York City and significant parts of New Jersey impacted, the regulators likely will scrutinize firms' BCPs and disaster recovery plans closely in the future.


1. The text of the amendments are found here.

2. Regulatory Notice 13-25, Business Continuity Planning (August 2013). The SEC Office of Compliance Inspections and Examinations at the same time issued a National Examinations Program Risk Alert, "SEC Examinations of Business Continuity Plans of Certain Advisers Following Operational Disruptions Caused by Weather-Related Events Last Year" (August 27, 2013).


The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions