On May 14, FINRA announced the first set of consolidated rules as it begins the process of reconciling the NASD and NYSE rulebooks. Since the NASD-NYSE Regulation merger in July 2007, members of both the NASD and NYSE ("dual members") have been subject to both sets of rules.
Rulebook Harmonization: The Process
Earlier this year, FINRA outlined its process for developing a consolidated rulebook.1 FINRA indicated that it would propose and adopt consolidated rules in phases, with several "analytical touchstones" to guide its rule review. According to the March Information Notice, FINRA staff first will identify obsolete or duplicative rules that will not be adopted. Second, the staff will identify significant differences between the two rulebooks to determine the extent to which existing rules should inform the consolidated rules. Third, the staff will consider what approach to take with respect to the consolidated rules (i.e., principles-based rules, tiered rules based on firm size and business model, and tailored rules for retail and institutional customers). Finally, the staff will determine which rules should be transferred into the consolidated rules without substantive modification.
In accordance with this process, FINRA has made its initial foray towards developing a consolidated rulebook. The rule proposals announced on May 14 address four areas: (1) Financial Responsibility, (2) Supervision and Supervisory Controls, (3) Books and Records, and (4) Investor Education and Protection. Comments are due by June 13, 2008.
Appendix A of this alert includes a chart listing the new FINRA rules and the corresponding NASD and/or NYSE rule on which the respective FINRA rules are based.
Financial Responsibility2
FINRA's proposed Financial Responsibility rules would adopt certain NYSE rules while combining similar NASD and NYSE rules. Certain provisions of the adopted NYSE rules would be new to previously NASD-only firms and primarily would affect carrying and clearing members and members operating pursuant to Rule 15c3-3(k)(2)(i) under the Securities and Exchange Act of 1934 ("(k)(2)(i) members"). Particularly, FINRA Rule 4120 would adopt the NYSE Rule 325(b) early warning levels and FINRA Rule 4521 would adopt NYSE Rules 325(b)(2) and 421(2) reporting requirements.
FINRA Rule 4110 Capital Compliance
Authority To Increase Capital Requirements
FINRA Rule 4110(a) adopts NYSE Rule 325(d). The rule would empower FINRA's Executive Vice President in charge of oversight for financial responsibility with the ability to require carrying and clearing members and (k)(2)(i) members to increase their net capital beyond the basic requirements. The rule also would allow FINRA to dictate more stringent treatment of specific items in computing net capital. To exercise this power, FINRA would issue a notice pursuant to FINRA Rule 9557 providing for an expedited hearing. Non-clearing firms, such as introducing broker-dealers, would not be subject to this provision.
The NYSE has in the past limited its use of Rule 325(d) and FINRA similarly expects to limit its use of FINRA Rule 4110(a) to extraordinary circumstances, such as unanticipated systemic market events that threaten the member's capital or where a member becomes over-concentrated in illiquid products.
Suspension Of Business Operations
FINRA Rule 4110(b)(1) would require a member firm to suspend all business operations during any period in which it is not in capital compliance with Exchange Act Rule 15c3-1. The rule would expressly permit a member to effect liquidating transactions upon customer direction and proprietary transactions that are reasonably expected to increase the member's net capital or reduce its risk.
Withdrawal Of Equity Capital
FINRA Rule 4110(c)(1) would require any equity capital contributed to a member to remain in the member for at least one year unless approved for withdrawal by FINRA in writing. FINRA Rule 4110(c)(2) would require carrying, clearing, and (k)(2)(i) members to obtain written approval from FINRA before withdrawing capital in excess of 10% of the member's excess net capital in any rolling 35-calendar-day period. Non-clearing members would not be subject to this provision. This requirement is based on, and would replace, NYSE Rule 312(h). Non-clearing NYSE members would no longer be subject to Rule 312(h).
Sale-And-Leasebacks, Factoring, Financing, Loans And Similar Arrangements
FINRA Rule 4110(d)(1)(A) would prohibit carrying, clearing, and (k)(2)(i) members from entering into sale-and-leaseback arrangements with respect to their assets, or a sale, factoring or financing arrangement with respect to unsecured accounts receivable, where such arrangement would increase a member's tentative net capital by 10% or more, without prior written FINRA authorization. This provision is based on NYSE Rule 328(a) and current NYSE non-clearing members would no longer be subject to this rule. FINRA Rule 4110(d)(1)(B) would prohibit a carrying member from entering into any arrangement concerning the sale or factoring of customer debit balances without prior written authorization from FINRA.
FINRA Rule 4110(d)(2) would require carrying, clearing, and (k)(2)(i) members to obtain FINRA's prior approval before entering into any loan agreement, exceeding 10% of the member's tentative net capital, that is intended to reduce the deduction in computing net capital for fixed assets and other assets that cannot be readily converted into cash under Exchange Act Rule 15c3-1(c)(2)(iv). FINRA Rule 4110(d)(3) would require any member subject to paragraphs (d)(1)(A), (d)(1)(B), or (d)(2) to obtain prior FINRA authorization before entering into any arrangement pursuant to those paragraphs if the aggregate of all such arrangements would exceed 20% of the member's tentative net capital. FINRA Rule 4110(d)(4) requires any agreement relating to a determination of a "ready market" for securities to be used as collateral for a loan by a bank under Exchange Act Rule 15c3-1(c)(11)(ii) to be submitted and acceptable to FINRA before the securities may be deemed to have a "ready market."
Subordinated Loans, Notes Collateralized By Securities And Capital Borrowings
FINRA Rule 4110(e)(1) would implement Appendix D of Exchange Act Rule 15c3-1 for all subordinated loans or notes collateralized by securities. Such arrangements would be subject to examining authority approval before becoming effective. FINRA Rule 4110(e)(2) would require FINRA approval of any loan to a member's general partner or LLC participant (whose rights are analogous to a general partner) in which the proceeds of the loan would be contributed to the capital of the member. The member would be required to submit a signed copy of the loan agreement. The agreement must have at least a 12-month duration and provide a non-recourse to the assets of the member, including a provision in the loan agreement that will estop the lender from reaching the assets of the broker-dealer.
FINRA Rule 4120 Regulatory Notification And Business Curtailment
Regulatory Notification
FINRA Rule 4120(a), based on NYSE Rule 325(b), would apply only to carrying, clearing, and (k)(2)(i) members. The rule would require prompt notification (i.e., within 24 hours) to FINRA when certain financial triggers are reached, including when a member's net capital falls below 150% of its minimum net capital requirement.
Restrictions On Business Expansion
FINRA Rule 4120(b) is based on NASD Rule 3130(c) and NYSE Rule 326(a). FINRA Rule 4120(b)(1) would restrict business expansion for carrying, clearing, and (k)(2)(i) members during any period when the conditions requiring FINRA notification under FINRA Rule 4120(a) exist. This provision is self-operating but FINRA also may issue a Rule 9557 notice directing a member not to expand its business. FINRA Rule 4120(b)(2) would allow FINRA to restrict any member's business expansion for any financial or operational reason by issuing a Rule 9557 notice. In response to either of these types of Rule 9557 notices, the member would have a right to an expedited hearing.
Reduction Of Business
FINRA Rule 4120(c) is based on NASD Rule 3130(d) and NYSE Rule 326(b). FINRA Rule 4120(c)(1) would be self-operative and would require carrying, clearing, and (k)(2)(i) members to reduce their business when a member's net capital exceeds the early warning levels set forth in FINRA Rule 4120(a)(1) after such conditions have existed for over 15 consecutive business days. FINRA also may issue a Rule 9557 notice directing a member to reduce its business and the member would have a right to an expedited hearing. FINRA 4120(c)(2) would allow FINRA, for any financial or operational reason, to require any member to reduce its business by issuing a Rule 9557 notice. The member would have a right to an expedited hearing.
FINRA Rule 4130 Regulation Of Activities Of Section 15C Members Experiencing Financial And/Or Operational Difficulties
FINRA Rule 4130, based on NASD Rule 3131, would apply only to certain firms subject to the United States Treasury Department's liquid capital requirements. The rule sets forth standards for when such firms shall not expand business, shall reduce business, and shall suspend business operations.
FINRA Rule 4521 Notifications, Questionnaires And Reports
FINRA Rule 4521 addresses FINRA's authority to request certain information from members to carry out its surveillance and examination responsibilities. The rule draws on NASD IM-3130 and Rule 3150 and NYSE Rules 325(b)(2), 416 and 421(2).
FINRA Rule 4521(a) would require carrying, clearing, and (k)(2)(i) members to provide FINRA such financial and operational information regarding the member or any of its correspondents that FINRA deems essential for the protection of investors and the public interest. FINRA Rule 4521(b) would impose a late fee of $100 for each day that a requested report is not timely filed, up to a maximum of 10 business days, as set forth in Schedule A to the By-Laws.3 FINRA Rule 4521(e) would require carrying, clearing, and (k)(2)(i) members to notify FINRA within 48 hours of a member's tentative net capital declining 20% or more from the amount contained in its most recent FOCUS report or, if later, most recent notice to FINRA.
FINRA Rule 4521(f) would require members carrying customer margin accounts to submit to FINRA customer information of (a) the total of all debit balances in securities margin accounts, and (b) the total of all free credit balances in all cash accounts and all margin accounts. The information would be on a settlement basis as of the last business day of each month and due to FINRA no later than the sixth business day of the following month.
FINRA Rule 4140 Audit
FINRA Rule 4140, drawing on NASD Rule 3130 and IM-3130 and NYSE rule 418, would incorporate FINRA's existing authority to request an audit or an agreed-upon procedures review due to concerns regarding the accuracy or integrity of a member's financial statements, books and records, or prior audited financial statements. The rule also imposes a late fee as set forth in Schedule A to the By-Laws.4
FINRA Rules 9557 And 9559 Procedures For Regulating Activities Under Rules 4110, 4120, And 4130 And Hearing Procedures For Expedited Proceedings Under The Rule 9550 Series
The revisions to these rules would address service of notice to members that are experiencing financial or operational difficulties and the related hearing procedures including a more expedited appeals process.
FINRA Rule 9557(d) would make notice served on a member immediately effective. However, upon timely request for a hearing, the requirements contained in the notice would be stayed for 10 business days or until a written order was issued. FINRA Rule 9557(e) would require a written request for a hearing within two business days after service of notice.
FINRA Rule 9559(f)(1) would require a hearing to be held within five business days of filing a request for a hearing. FINRA Rule 9559(o)(4) would require, within two business days of the close of the hearing, the Office of Hearing Officers to issue a written order that reflects the Hearing Panel's summary determinations, effective when issued, and a written decision within seven days of the issuance of the written order.
Supervision And Supervisory Controls5
FINRA's proposed supervision and supervisory controls rule would adopt, in large part, existing NASD rules. However, unlike the predecessor NASD rules, the FINRA rules would be more principles-based and would accommodate the different business models and resource levels applicable to small versus large member firms.
FINRA Rule 3110 Rule Supervision
Proposed FINRA Rule 3110 incorporates provisions currently contained within NASD Rules 3010, 3012, and 3040, and NYSE Rule 342. In a format more consistent with current NYSE rules, the proposal addresses a number of topics within Supplementary Material to FINRA Rule 3110. The Supplementary Material codifies existing FINRA staff guidance, moves certain text from NASD rules into the Supplementary Material, and adds clarifications to the rules to assist firms in complying with their supervisory obligations. In addition, the Supplementary Material adopts existing NYSE rules related to firms' insider trading procedures, as mandated by the Insider Trading and Securities Fraud Enforcement Act of 1988.
Member Supervisory Systems
FINRA Rule 3110(a) largely adopts current NASD Rule 3010(a), with minimal change. The proposed rule would require the designation of an appropriately registered principal to supervise each type of business in which a member firm engages, including activities that do not independently require registration as a broker-dealer. The current OSJ requirements in NASD Rule 3010(a)(3) would be moved into supplementary material without substantive changes.
Written Procedures
FINRA Rule 3110(b) would incorporate requirements currently contained within NASD Rules 3010(b)(1), 3010(d) and 3040, and NYSE Rule 401A. The requirements for tape recording of conversations, currently in NASD Rule 3010(b)(2), will be reconstituted as a separate rule. Several of the current NASD rules are retained unchanged, although the proposal differs from the current regulations in several important respects. Important changes include:
- Investment Banking and Securities Business Current NASD
rules would be amended to clarify that principal review
applies to all transactions relating to a member's
investment banking and securities business. In addition, the
proposal includes new Supplementary Material that clarifies
that review of such transactions may be risk-based.
- Outside Business Activities NASD Rule 3040 is deleted and
replaced with a streamlined rule that would require an
associated person to obtain the member firm's prior
written approval before engaging in any outside investment
banking or securities business. If the firm approves the
outside business activity, the activity will be considered
within the scope of the firm's business and must be
supervised accordingly. The proposal contains a limited
exception for bank-related securities activities of dual
employees to the extent that these securities activities fall
within a statutory or regulatory exemption from registration
as a broker or dealer. To rely on this exception, member
firms first must obtain certain written assurances from the
bank.
- Customer Complaints FINRA Rule 3110(b)(5) would
incorporate NYSE Rule 401A regarding customer complaints.
However, the proposed rule would not require firms to
document and review oral customer complaints.
- Supervision of Supervisory Personnel The proposal deletes
the prescriptive provisions currently contained in NASD Rule
3012 regarding heightened supervision of producing managers,
including heightened supervision when a producing
manager's revenues rise above a certain threshold.
Instead, the proposal would require procedures designed to
prevent supervision from being lessened in any manner due to
conflicts of interest with respect to a supervised person,
including conflicts as a result of that person's
position, revenue generated, or any compensation a supervisor
may derive from the supervised person. The proposal would
prohibit supervisors from supervising their own activities or
reporting to, or having their compensation or continued
employment determined by, a person they are supervising. The
rule proposal contains a limited exception when, due to the
size of a firm or a supervisor's very senior
position, a member firm could not comply with these
requirements. In order for a firm to avail itself of this
exception, it must document why it could not do so and have a
supervisory arrangement that otherwise meets the requirements
of the rule.
Internal Inspections
The proposal would adopt NASD Rule 3010(c), except that FINRA Rule 3110(c) would not require firms to implement heightened office inspections merely because a branch manager and the person conducting the inspection report to the same person. Instead, the proposed rule would require a member firm to prevent an inspection from being less effective in any manner due to conflicts of interest and would prohibit inspections of a location by someone who is an associated person of that location or is supervised by someone at that location. If a firm could not comply with this second requirement due to its size or business model, the firm would be required to document why it could not comply and how the inspection process prevents conflicts of interest from hindering the effectiveness of an inspection.
Branch Offices And OSJs
FINRA Rule 3110(d) would adopt existing NASD and NYSE definitions of "branch office" and "office of supervisory jurisdiction" without change.
FINRA Rule 3120 Supervisory Control System
FINRA Rule 3120 would replace existing NASD Rule 3012 and would incorporate the current rule's testing and verification requirements. In addition, the rule would include certain content requirements of NYSE Rule 342.30 for firms that reported gross revenue of at least $150 million on their FOCUS report in the prior calendar year. Such firms would have to include in the following year's reports a tabulation of customer complaints and a discussion of the firm's compliance efforts during the previous year.
Other Supervisory Rules
FINRA Rule 3150 rewrites current NASD Rule 3110(i) related to time limits for member firms holding customers' mail. While NASD Rule 3110(i) mandates the maximum length of time a firm may hold a customer's mail, the proposed rule generally would allow firms to hold customer mail in accordance with the customer's instructions. If a member is holding mail for an extended period of time, it must periodically verify that the customer's instructions still apply.
FINRA Rule 3170 would adopt the provisions of current NASD Rule 3010(b)(2) regarding tape recording of conversations without substantive change.
FINRA Rule 1260 would impose a responsibility on member firms to investigate applicants for registration. This mandate currently is contained in NASD Rule 3010(e) and is adopted without substantive change.
Deleted NASD And NYSE Rules
Following the adoption of the proposed rules, certain legacy NASD and NYSE supervisory rules would no longer apply to member firm's activities.6 Many of these rules have been incorporated into the proposed rules described above; however, several provisions would be deleted without being adopted in the proposed rules.
Among the rules to be eliminated without the adoption of a corresponding FINRA Rule is NYSE Rule 343 regarding branch office space-sharing arrangements and main office of business hours. These requirements are duplicative of certain information currently reported in Form BD (certain office space sharing disclosures) or are considered by FINRA to be outdated (hours of operation, display of membership certificates, and permissible office space sharing arrangements).
Books And Records7
FINRA's proposed books and records rules attempt to streamline the existing rules while deleting duplicative and outdated requirements. The proposed rules adopt several NASD rules while incorporating NYSE Rule 440 on general bookkeeping requirements.
Rule 4511 General Requirements
FINRA Rule 4511 would replace NASD Rule 3110(a) and NYSE Rule 440 and would streamline the language to clarify that member firms are obligated to make and preserve books and records as required by FINRA Rules, Section 17(a) of the Securities Exchange Act of 1934, and applicable Securities and Exchange Commission rules.
NASD Rule 3110(b) Records Relating To The Three Quote Rule
FINRA proposes to adopt NASD Rule 3110(b) (Marking of Customer Order Tickets) unchanged as part of the Transitional Rulebook with the intention of moving the rule and incorporating it within what is now NASD Rule 2320(g) (the Three Quote Rule).
FINRA Rule 4512 Customer Account Information
FINRA Rule 4512 would incorporate NASD Rule 3110(c) and make the following changes:
Signature Requirement
FINRA Rule 4512(a)(1)(C) would require firms to maintain the name of the associated person, if any, responsible for the account rather than require the signature of that person.
Discretionary Accounts
FINRA Rule 4512(a)(3) would simplify NASD Rule 3110(c)(3) and require:
- That the member maintain a record of the dated signature
of each named, natural person authorized to exercise
discretion in the account;
- Delete the requirement to record the age of the customer
in connection with exempted securities;
- Provide that the requirement not apply to customer
granted discretion as to the price or the time to execute an
order for the purchase or sale of a definite dollar amount or
quantity of a specified security; and
- Limit a firm's ability to maintain discretionary
accounts and exercise discretion in such accounts to the
extent permitted under the federal securities laws.
Clarifying Revisions
FINRA Rule 4512.01 would clarify that required customer account records are subject to a six-year retention period. FINRA Rule 4512(b) would provide that with respect to accounts opened pursuant to prior NASD Rules, firms will be permitted to continue maintaining the information required by those prior NASD Rules until such time as they update the account information in the course of their routine and customary business or as required by other applicable laws or rules.
Rule 4513 Records Of Written Customer Complaints
FINRA Rule 4513 would merge NASD Rules 3110(d) (Record of Written Complaints) and 3110(e) (definition of "complaint"). FINRA Rule 4513(a) would clarify that the obligation to keep customer complaint records in each OSJ applies only to complaints that relate to that office and complaints that relate to activities supervised by that office. The rule would allow firms to maintain the records at the OSJ or make them promptly available at such office upon FINRA's request. Also, the rule would increase the time for which a firm must preserve these records from three years to four years.
NASD Rule 3110(f) Disclosures Relating To Customer Predispute Arbitration Agreements
NASD Rule 3110(f) (Requirements When Using Predispute Arbitration Agreements for Customers Accounts) would be renumbered and located in the disclosure section of the Consolidated FINRA Rulebook with non-substantive changes as a standalone rule.
FINRA Rule 4514 Authorization Records For Negotiable Instruments Drawn From A Customer's Account
FINRA Rule 4514, based on NASD Rule 3110(g), would require a member firm to receive a customer's express written authorization before it could obtain from a customer or submit for payment a check, draft or other form of negotiable paper drawn on the customer's checking, savings, share, or similar account. The proposed rule makes clear that such written authorizations must be preserved for a period of three years following the date that the authorization expires.
NASD Rule 3110(h) Order Audit Trail System Recordkeeping Requirements
NASD Rule 3110(h) would be relocated with non-substantive changes into the OATS rules to be part of the new Consolidated FINRA Rulebook.
NASD Rule 3110(i) Hold Mail Rule
NASD Rule 3110(i) (Holding of Customer Mail) would be rewritten as a standalone rule and relocated to the supervision section of the consolidated rulebook (see above).
FINRA Rule 4515 Approval And Documentation Of Changes In Account Name Or Designation
FINRA Rule 4515, based on NASD Rule 3110(j), would clarify that the essential facts relied upon by the principal approving any changes in account names or designations must be documented in writing prior to execution.
Investor Education And Protection8
FINRA Rule 2267 would adopt, without change, current NASD Rule 2280. NASD Rule 2280 requires member firms to provide customers with certain disclosures in writing at least once every calendar year. The required disclosures include the hotline number for the Public Disclosure Program, FINRA Regulation's website address, and a statement regarding the availability of an investor brochure that includes information regarding the Public Disclosure Program.
The proposed rule would apply to all firms except member firms that do not have customers or are introducing firms that are party to a carrying arrangement so long as the carrying firm complies with FINRA Rule 2267. In a departure from the current NASD Rule, the proposed rule would apply to member firms that conduct a limited business with customers, such as mutual fund distributors and firms that deal solely with direct participation programs.
Conclusion
The rule proposals mark an important milestone in the consolidation of the NASD and NYSE Regulations. As a first step towards developing a consolidated rulebook, the proposals borrow heavily from existing member regulation, but also begin to recognize the differences among member firms due to size and business model. While the proposal does rely on elements of the current NASD and NYSE rulebooks there are important changes that member firms should review and comment on.
|
Subject |
FINRA Rule |
NASD Rule |
NYSE Rule |
|
Financial Responsibility |
|||
|
Capital Compliance |
4110 |
|
|
|
4110(a) |
|
325(d) |
|
4110(b)(1) |
3130(e) |
|
|
4110(c)(1) |
|
312(h) |
|
4110(d)(1)(A)-(B) |
|
328(a) 328(b) |
|
4110(e)(1) |
|
420 |
|
Regulatory Notification and Business Curtailment |
4120 |
|
|
|
4120(a) |
|
325(b) |
|
4120(b) |
3130(c) |
326(a) |
|
4120(c) |
3130(d) |
326(b) |
|
Regulation of Activities of Section 15C Members Experiencing Financial and/or Operational Difficulties |
4130 |
3131 |
|
|
Notifications, Questionnaires and Reports |
4521 |
IM-3130 |
325(b)(2) |
|
Audit |
4140 |
3130 |
418 |
|
Supervision And Supervisory Controls |
|||
|
Responsibility to Investigate Applicants for Registration |
1260 |
3010(e) |
|
|
Supervisory System |
3110(a); 3110.07 |
3010(a) |
342.16 |
|
Written Procedures |
3110(b) |
3010(b); 3010(d)(1); 3040 |
401A |
|
3110(b)(1) |
3010(b)(1) |
|
|
3110(b)(2); 3110.06 |
3010(d)(1) |
|
|
3110(b)(3); 3110.07 |
3040 |
407(b); |
|
3110(b)(4); 3110.09; 3110.10; 3110.11; 3110.12 |
3010(d) |
401(b) |
|
3110(b)(5) |
|
401A |
|
3110(b)(6); 3110.13 |
3010(b)(3); 3012 |
342.19 |
|
Internal Inspections |
3110(c); 3110.14; 3110.15; 3110.16 |
3010(c); |
401(b) |
|
Branch Offices and Offices of Supervisory Jurisdiction |
3110(d); 3110.01; 3110.02; 3110.03; 3110.04 |
3010(g); |
342.10 |
|
Supervisory Control System |
3120 |
3012(a) |
342.30 |
|
None |
3012(b) |
|
|
Holding Customer Mail |
3150 |
3110(i) |
|
|
Tape Recording of Conversations |
3170 |
3010(b)(2) |
|
|
Applicant's Responsibility |
None |
3010(f) |
|
|
Office Space Sharing Arrangements |
None |
|
343 |
|
Foreign Branch Offices |
None |
|
342.12 |
|
Acceptability of Supervisors |
None |
|
342.13 |
|
Experience of Senior Management |
None |
|
342.14 |
|
Small Offices |
None |
|
342.15; Interpretations 342.15/01-05 |
|
Reports to Control Persons |
None |
|
354 |
|
Reporting Requirements |
None |
|
351(e) |
|
Books And Records |
|||
|
General Requirements |
4511 |
3110(a) |
440 (deleted) |
|
Records Relating to the Three Quote Rule |
None |
3110(b) |
|
|
Customer Account Information |
4512 |
3110(c) |
|
|
4512(a)(1)(C) |
3110(c)(1) |
|
|
4512(a)(3) |
3110(c)(3) |
|
|
4512(c) |
3110(c)(4)
3090 IM-3110 (deleted) |
|
|
Records of Written Customer Complaints |
4513 |
3110(d) |
|
|
Disclosures Relating to Customer Predispute Arbitration Agreements |
None |
3110(f) |
|
|
Authorization Records for Negotiable Instruments Drawn From a Customer's Account |
4514 |
3110(g) |
|
|
Order Audit Trail System Recordkeeping Requirements |
None |
3110(h) |
|
|
Hold Mail Rule |
None |
3110(i) |
|
|
Approval and Documentation of Changes in Account Name or Designation |
4515 |
3110(j) |
|
|
Investor Education |
|||
|
Required annual disclosures to customers |
2267 |
2280 |
None |
Footnotes
1. FINRA Information Notice (March 12, 2008).
2. FINRA Regulatory Notice 08-24 (May 2008).
3. Id.
4. See FINRA By-Laws, Schedule A, Sec. 4(g)(1).
5. FINRA Regulatory Notice 08-24 (May 2008).
6. The eliminated NASD rules include IM-1000-4, Rule 3040 and Rule 3110(i). The eliminated NYSE rule provisions are Rules 342.10, 342.12, 342.13, 342.14, 342.15, 342.16, 342.19, 351(e), 354, and 401(b).
7. FINRA Regulatory Notice 08-25 (May 2008).
8. FINRA Regulatory Notice 08-26 (May 2008).
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.
