SEC Approves New FINRA Supervision Rules

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The current rulebook of the Financial Industry Regulatory Authority consists of FINRA rules, legacy National Association of Securities Dealers (NASD) rules (that apply to all FINRA member firms) and rules incorporated from the New York Stock Exchange (that apply only to those member firms of FINRA that are also members of the NYSE). The Securities and Exchange Commission has approved new FINRA rules to replace existing NASD rules and corresponding provisions of the NYSE rules. The new rules become effective on December 1, 2014. 

The new FINRA rules governing supervision are with respect to, and replace existing NASD rules and corresponding provisions of the NYSE rules regarding, supervisory systems, written procedures regarding supervision, inspection requirements, transaction review and reporting, branch office and office of supervisory jurisdiction designations, content requirements, obligations relating to holding of customer mail, and requirements relating to the tape recording of registered persons by certain firms. Specifically, new FINRA Rules 3110 (Supervision) and 3120 (Supervisory Control System) replace NASD Rules 3010 (Supervision), 3012 (Supervisory Control System) and corresponding provisions of the NYSE Rules and Interpretations. In addition, new FINRA Rules 3150 (Holding of Customer Mail) and 3170 (Tape Recording of Registered Persons by Certain Firms) replace NASD Rules 3110(i) and 3010(b)(2), respectively.  

Click here to read FINRA Regulatory Notice 14-10.


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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