ARTICLE
22 November 2018

FINRA Proposes Custodial Recordkeeping Amendments

CW
Cadwalader, Wickersham & Taft LLP

Contributor

Cadwalader, established in 1792, serves a diverse client base, including many of the world's leading financial institutions, funds and corporations. With offices in the United States and Europe, Cadwalader offers legal representation in antitrust, banking, corporate finance, corporate governance, executive compensation, financial restructuring, intellectual property, litigation, mergers and acquisitions, private equity, private wealth, real estate, regulation, securitization, structured finance, tax and white collar defense.
Currently, the custodian must be an individual associated with the firm at the time the broker-dealer withdraws from registration.
United States Corporate/Commercial Law

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.

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.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More