Tuesday, May 27, 2008

FINRA Files Series of Consolidated Rules

FINRA has been undertaking the daunting task of combining the rules of the NASD and the NYSE, since the merger of the regulatory functions of the NASD and the NYSE last July. FINRA has said that as new rules are written and approved those rules will become part of the FINRA Consolidated Rulebook, and the NASD and NYSE version of the rule will be deleted from their respective rulebooks.

And the process has started. FINRA has published some of the proposed rules, prior to submitting the proposals to the SEC for approval. The proposed rules all their own comment period, but all of the comment periods expire on June 13, 2008.

The filings are voluminous - it appears to be well over 500 pages of filings.

Here are the rules that are being filed, and links to the filings:

Regulatory Notice 08-23 - Proposed Consolidated FINRA Rules Governing Financial Responsibility. Contains proposed Rules 4110, 4120, 4130, 4140 and 4521 which are new, consolidated rules based in part on existing NASD and NYSE Rules and would govern members' financial responsibility requirements. Proposed FINRA Rules 9557 and 9559 would revise NASD Rules 9557 and 9559, respectively, and would afford members served with a notice under the financial responsibility rules an expedited appeal process. (In addition, FINRA would make conforming revisions to Section 4(g) of Schedule A to the FINRA By-Laws.)

Regulatory Notice 08-24 - Proposed Consolidated FINRA Rules Governing Supervision and Supervisory Controls. The proposed rules would re-write certain provisions of the existing supervision and supervisory control rules in a manner that provides firms with greater flexibility to tailor their supervisory and supervisory control procedures to reflect their business, size and organizational structure.

Regulatory Notice 08-25 - Proposed Consolidated FINRA Rules Governing Books and Records Requirements. Based in large part on the current rules, the proposed rules would rewrite the FINRA books and records provisions regarding preservation of books and records to evidence compliance with federal securities laws and rules, as well as to enable FINRA and the SEC to conduct examinations.

Regulatory Notice 08-26 - Proposed Consolidated FINRA Rule Addressing Investor Education and Protection. This rule is new, and would require member firms, with certain exceptions, to provide customers with FINRA's Web site address and information regarding FINRA's BrokerCheck program at least once every calendar year.

Anyone can submit comments on any of these proposals through the FINRA Submit Comments Page
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