On August 13, the Securities and Exchange Commission published a notice that the Financial Industry Regulatory Authority proposes to adopt FINRA Rules 2090 (Know Your Customer) and 2111 (Suitability) as part of the Consolidated FINRA Rulebook. The proposed Know Your Customer and Suitability rules are based largely on the following:

*Incorporated NYSE Rule 405(1) (Diligence as to Accounts);

*NASD Rule 2310 (Recommendations to Customers (Suitability)); and

*both rules’ related interpretative materials (together, the Existing Rules).

The proposed rules would delete the Existing Rules; however, the proposed rules seek to clarify and strengthen the core features of the Existing Rules.