FINRA proposed to amend FINRA Rule 4570, which requires a broker-dealer that withdraws from SEC registration to designate a person to act as custodian of the firm's books and records. Currently, the custodian must be an individual associated with the firm at the time the broker-dealer withdraws from registration.
FINRA proposed to amend Rule 4570 to:
- give the withdrawing firm the option to designate another FINRA member broker-dealer (e.g., an introducing firm's clearing broker) to act as custodian of its books and records after the firm withdraws from registration; and
- clarify the responsibilities of the books and records custodian, including requiring the designated custodian to consent to the arrangement and file a notice with FINRA acknowledging its responsibilities.
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