FINRA Proposes Changes to FINRA Rules 7410 and 2121

The Financial Industry Regulatory Authority, Inc. is proposing to amend FINRA Rule 7410 to permit members which, under FINRA Rule 7410, are not considered to be “reporting members” (i.e., because, among other things, such members route order information to a single “reporting member”) to route any order information to two “reporting members” without being deemed to be a “reporting member.” Such permission is conditioned on a member routing orders to each of the two “reporting members” on a pre-determined schedule approved by FINRA for a time period not to exceed one year.

Separately, as part of FINRA’s initiative to develop a new consolidated rulebook, FINRA is proposing changes to FINRA Rule 2121 to adopt current NASD Rule 2440 and Interpretive Material 2440-1 and 2440-2 as FINRA Rule 2121, which generally provide that members buying or selling securities for their own accounts shall buy or sell at a price that is fair, and members buying or selling securities as agents for customer accounts shall charge commissions that are fair, without any substantive changes thereto. 

More information on the proposed rule change to FINRA Rule 7410 is available here

More information on the proposed rule change to FINRA Rule 2121 is available here.

 

Topics:  FINRA, Proposed Amendments, Reporting Requirements, Securities

Published In: Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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