United States: FINRA Highlights Developments In Transaction Reporting And Data Dissemination For Inclusion In Firm Element Training Plans

FINRA focused on transaction reporting and data dissemination in a podcast on core elements for firm training plans. This was the second podcast in the FINRA Continuing Education Council's Fall 2016 Firm Element Advisory four-part series.

The podcast highlighted the following developments:

• Best Execution Rule. The Firm Element Advisory provides a link to guidance that (i) clarifies FINRA's best execution rule in relation to automated markets as well as securities in any markets that have limited quotation or pricing information available; and (ii) requires firms to regularly and rigorously examine execution quality likely to be obtained from the different markets trading a security.
• Crowdfunding. The SEC approved new FINRA funding portal rules for SEC-registered funding portals that become FINRA members because of the Jobs Act and the SEC's regulation crowdfunding.
• Private Placements and Public Offerings. FINRA found a pattern of brokers not complying with federal contingency offering requirements in a review of securities offering documents. In response, FINRA published a regulatory notice providing guidance on contingency offerings and describing a firm's responsibilities and the requirements for handling investor funds until the contingency is met.
• Covered Agency Transactions. FINRA made amendments which require margin requirements for the following types of transactions: (i) adjustable rate mortgages, (ii) specified pools, and (iii) collateralized mortgage obligations.
• Mutual Funds. The Firm Element Advisory Update contains links to all of FINRA's guidance on mutual funds, which includes rules, notices, news releases and investor education materials.
• Registrations, Disclosures and Qualifications. The SEC approved amendments to FINRA's communications. The new rules require firm websites to include a readily apparent reference and hyperlink to BrokerCheck. In addition, the SEC approved changes that reduce the waiting period for release of information reported on Form U5 from fifteen days to three business days through BrokerCheck. Form U5 is used by firms to report the termination of an employee's registration.

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