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

Featured video

Events

Pershing's Cirrotti: What's next for the fiduciary rule?

The Department of Labor's new fiduciary rule will have a lasting impact on this industry. Have we finally reached the finish line? Pershing's Rob Cirrotti explains what is to come.

Video Spotlight

Will It Last As Long As Your Clients Do?

Sponsored by Prudential

Video Spotlight

The Catalyst

Sponsored by Pershing

Latest news & opinion

Brian Block's $4 million bonus was tied to a key metric at ARCP

Prosecution rests case in fraud trial against CFO of American Realty Capital Properties.

Edward Jones is winning the Google search war

Brokerage firm's digital marketing investment helps land it at the top of local and overall search engine results, report finds.

Voya's win in 401(k) fee suit involving Financial Engines bodes well for other record keepers

Fidelity, Aon Hewitt and Xerox HR Solutions are currently defending against similar fiduciary-breach claims.

Collective investment trusts getting more attention from 401(k) advisers

The funds are catching on due largely to lower costs and more product availability, but come with some inherent drawbacks.

Vanguard rides robo-advice wave to $65B in assets

Personal Advisor Services, four times the size of its closest competitor, combines digital and human touch.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print