FINRA once again delays implementation of amendments to FINRA rule 4210

Eversheds Sutherland (US) LLP

Eversheds Sutherland (US) LLPThe Financial Industry Regulatory Authority, Inc. (FINRA) filed a proposed rule change with the Securities and Exchange Commission (SEC) on October 25, 2019, to once more delay the implementation of amendments to FINRA Rule 4210 (Amended FINRA Rule 4210) until March 25, 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, 2020, 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 will continue to consider these requests as well as potential amendments to the proposed 4210 amendments to avoid 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 text of the proposed rule change is available on FINRA’s website at Comments on the proposed rule change should be submitted on or before the date which is 21 days from its publication in the Federal Register, which has not yet occurred.

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