FINRA reminded broker-dealers (i) that the SEC approved a supplement to the Options Disclosure Document ("ODD"), which contains disclosures regarding exchange-traded (or "standardized") options, and (ii) of requirements to distribute the ODD and the supplement to customers. The supplement amended the ODD to include disclosures regarding:
- foreign currency index options and implied volatility index options;
- changes to the procedure for making adjustments to the terms of standardized options contracts to address dividend distributions and other corporate events, and how adjustments to the terms of a standardized option contract may affect the value of the option; and
- the change in the settlement date for the exercise of standardized options from the third business day following exercise of the option (T+3) to the second business day following exercise (T+2).
The FINRA notice also reminds broker-dealers of SEC rules and FINRA requirements to deliver the ODD and the new supplement to customers that trade standardized options.
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