FINRA delays implementation of amendments to FINRA Rule 4210 to October 26, 2021

Eversheds Sutherland (US) LLPThe Financial Industry Regulatory Authority, Inc. (FINRA) filed a proposed rule change with the Securities and Exchange Commission (SEC) on December 22, 2020, to once more delay the implementation of amendments to FINRA Rule 4210 (Amended FINRA Rule 4210) until October 26, 2021. Amended FINRA Rule 4210 will require the margining of: (1) specified pool transactions; (2) transactions in collateralized mortgage obligations, issued in conformity with a program of an agency or a government-sponsored enterprise, with forward settlement dates (collectively, Covered Agency Transactions); and (3) to-be-announced transactions, including adjustable-rate mortgage transactions.

Amended FINRA Rule 4210 was scheduled to take effect on March 25, 2021, after previous delays due to requests by market participants that (i) FINRA reconsider the potential impact of Amended FINRA Rule 4210 on smaller and medium-sized broker-dealers; and (ii) they receive additional time to change systems and amend margining documentation to comply with Amended FINRA Rule 4210.

FINRA filed its latest proposed rule change to delay the implementation of Amended FINRA Rule 4210 because it is considering, in consultation with industry participants and other regulators, potential amendments to the requirements of Amended FINRA Rule 4210, and anticipates submitting a proposed rule change to the SEC. FINRA believes that this is appropriate in the interest of avoiding unnecessary disruption to the Covered Agency Transaction market.

FINRA filed the proposed rule change for immediate effectiveness and requested that the SEC waive the requirement that a proposed rule change not become operative for 30 days after its filing. The rule change has been published in the Federal Register: Comments on the proposed rule change should be submitted on or before February 1, 2021.1


1 See 86 Fed. Reg. 2021, 2023 (Jan. 11, 2021).

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