Take two for Finra on advance-notice rule

Plans to reissue a package of controversial membership rules regarding alerts on business changes

Feb 24, 2013 @ 12:01 am

By Dan Jamieson

+ Zoom
(Bloomberg)

Finra is planning to reissue a package of controversial membership rules regarding alerts on business changes.

In an e-mail sent to member firms Feb. 14, Financial Industry Regulatory Authority Inc. chief executive Richard G. Ketchum said the board had approved issuing a revised proposal in response to comments on the previous one, which was floated in 2010.

The original proposal drew a sharp response from the brokerage industry, which said Finra's plan to require 30 days' notice for changes in a number of routine business activities was too far-reaching.

Among other things, Finra wanted advance notice of new products or services; expansion of personnel beyond certain limits; transactions that involved 10% or more of a firm's ownership, assets or revenue; and changes in a member's service providers.

If the changes had been ap-proved, the advance notice would have allowed Finra to require a formal approval process — known as a continuing-member application — and object to any changes.

The proposal was designed to avoid fraud at both broker-dealers and their affiliates.

In his e-mail, Mr. Ketchum said the revised proposal would include provisions to address regulatory issues identified by Finra and to codify existing interpretations and practices.

Andrew DeSouza, a SIFMA spokesman, and Finra spokeswoman Michelle Ong declined to comment about Finra's plan to reissue the rule.

In a statement, FSI general counsel David Bellaire noted that Mr. Ketchum's e-mail did not specify what will be included in the new proposal.

“We are hopeful that Finra has addressed the issues we raised in our original comment letter,” he said.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

Events

What to do when your partnership ends

Breaking up is hard to do: and that is certainly true when it comes to advisory firms. Financial Adviser Rob Holdford tells his story and explains how you can survive and thrive when a partnership dissolves.

Video Spotlight

The Search for Income

Sponsored by PGIM Investments

Recommended Video

Path to growth

Latest news & opinion

The most important tax changes for 2018

The Internal Revenue Service issued inflation adjustments to more than 50 tax provisions for 2018.

Shift to Roth 401(k)s 'highly likely' part of tax reform: former Treasury official Mark Iwry

Mandated contributions to Roth accounts would likely only be partial, as opposed to having a full repeal of pre-tax accounts.

E*Trade acquiring custodian Trust Company of America

Discount broker buying second-tier custodian for $275 million.

Another thousand Dow points higher, and investors yawn

Market milestones keep falling like dominoes, with 51 records broken so far this year.

LPL retains $570 million with super-OSJ deal

Kansas-based nVision Wealth will come under supervision of Chicago-based IHT Wealth Management.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print