Finra reviews effectiveness of broker-dealer rules

Tackles broker communications with the public as well as gifts, gratuities and non-cash payments; will look at other regulations

Apr 8, 2014 @ 12:54 pm

By Mark Schoeff Jr.

Finra, broker-dealers, compliance, regulation
+ Zoom

Finra on Tuesday began reviewing existing broker-dealer rules to see if they are keeping pace with the markets.

The first two areas that the Financial Industry Regulatory Authority Inc. will assess are rules dealing with broker communications with the public and those that govern gifts, gratuities and non-cash payments to brokers.

“Finra believes it is important to look back at its significant rulemakings to determine whether those rules and rule sets are meeting their intended investor protection objectives by reasonably efficient means,” Robert Colby, Finra's chief legal officer, said in a statement. “By thoroughly assessing the impact of existing rules, Finra will be able to ensure that its rules remain pertinent to current industry and market conditions and carefully tailored to protect the interests of the investing public.”

Finra, the industry-funded broker-dealer regulator, will conduct the rules review in two phases.

First, Finra staff will analyze whether the rules are duplicative or ineffective, out of step with current market conditions or leave regulatory gaps.

Part of the first phase includes a request for public input. The comment period for each of the first two reviews is May 8.

The Finra staff will recommend to the organization's board whether the rules should be kept intact, modified or ended. If the board decides to change a rule, amendments will be proposed and comments solicited through the normal rule-making process.

Last year, Finra hired its first chief economist, Jonathan Sokobin. His office is responsible for analyzing the costs and benefits of proposed rules as well as those that are already on the books.

The regulatory notice for the first two reviews indicates that more are coming.

“Finra intends to select relevant rules and to conduct retrospective rule reviews on an ongoing basis to ensure that its rules remain relevant and appropriately designed to achieve their objectives, particularly in light of environmental, industry and market changes,” according to the notice.

0
Comments

What do you think?

View comments

Recommended for you

Latest news & opinion

DOL fiduciary rule opponents want to push implementation back until 2019

ICI, Chamber of Commerce among groups asking for delay, while Democratic lawmakers call on DOL to keep to its earlier planned schedule of Jan. 1, 2018.

Take 5: Vanguard's new CIO Greg Davis talks bonds, stocks and costs

Having just stepped into the role, this veteran of the firm now oversees $3.8 trillion in assets in more than 300 mutual funds and exchange-traded funds.

Tech companies deploy behavioral finance tools for advisers

They seek to turn knowing more about clients into growing more revenue.

Retirement planning for women

Longer lifespans and lower savings require creative income strategies.

Sean Spicer resigns as press secretary after Anthony Scaramucci is appointed communications director

Scaramucci is known as an ardent foe of the DOL fiduciary rule, having said during the campaign that Trump would repeal it .

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print