Through its recent Regulatory Notice 14- 35, the Financial Industry Regulatory Authority (“FINRA”) announced and sought comments on its proposed new Rule, FINRA Rule 2231, governing the frequency and availability of customer account statements. This was the third solicitation for comments sought by FINRA for the proposed Rule. The first was announced in April 2009 through SR- FINRA - 2009 -028 (the “Initial Filing”) and the second in Amendment No. 1 to the Initial Filing. Twelve comment letters were received in response to the Initial Filing and 8 comment letters in response to Amendment No. 1. Through Regulatory Notice 14 - 35, FINRA seeks comment on the revisions made in light of these comment letters.

In its Initial Filing, FINRA proposed to transfer NASD Rule 2340 and NYSE Rule 409 into the consolidated FINRA Rulebook as FINRA Rule 2231, but only after incorporating significant changes to these existing Rules. Specifically, FINRA sought to increase the frequency at which customer account statements must be sent to customers, requiring member firms to deliver customer account statements “at least once every month to each customer whose account had activity during the period” as opposed to the current quarterly delivery. FINRA also sought to transfer provisions from the current NYSE Rule 409 which only permit customer account statements to be sent to third parties if the customer provides written authorization. These, and other proposals contained in the Initial Filing, sought significant and substantive changes to the policies governing the delivery and availability of customer account statements, and commenters' feedback was overwhelmingly negative.