FINRA set June 1, 2022, as the first "evaluation date" for FINRA's new Rule 4111 ("Restricted Firm Obligations"). The new rules addressing firms with a significant history of misconduct went into effect on January 1, 2022.
As previously covered, FINRA Rule 4111 establishes a process that FINRA will use, on an annual basis, to determine whether a member firm should be designated as a "Restricted Firm" subject to additional obligations. The annual process identifies member firms with a higher level of risk-related disclosures. On the Evaluation Date, FINRA's Department of Member Supervision will annually compute Preliminary Identification Metrics based on six categories of events or conditions. Though the first Evaluation Date was set for June 1, 2022, FINRA stated that the annual calculations of which member firms may be designated will be at least 30 days after the Evaluation Date. The purpose of this delay is to account for the time between when relevant disclosure events occurred and when firms must report those events on the Uniform Registration Forms.
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