Corporate and Financial Weekly Digest, Featuring Topics on Broker-Dealer, Derivatives, CFTC and UK/Brexit/EU Developments

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FINRA Requests Comment on Proposed Amendments to FINRA Rule 4521 and New Supplemental Liquidity Schedule

On January 8, the Financial Industry Regulatory Authority (FINRA) requested comment on proposed amendments to FINRA Rule 4521. Currently, Rule 4521(c) requires each carrying or clearing firm to notify FINRA after tentative net capital has declined 20 percent or more from the amount reported on the most recent Financial and Operational Combined Uniform Single (FOCUS) Report or notification filed with FINRA. The proposed amendments would also require certain firms (i.e., carrying or clearing firms with $25 million or more in total credits as determined by the customer reserve formula computation, and each firm whose aggregate amount outstanding under repurchase agreements, securities loan contracts and bank loans is equal to or greater than $1 billion) to notify FINRA within 48 hours after the occurrence of various events that signal an adverse change in liquidity risk. Such events include certain losses of access to secured funding, counterparty increases in collateral haircuts and early terminations of outstanding repurchase contracts.

Please see full Newsletter below for more information.

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Katten Muchin Rosenman LLP
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