Last updated: 10:26 / Monday, 20 April 2015
April Board of Governors

FINRA Board Approves Changes to Communications With the Public Rules, Trading Activity Fee

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FINRA Board Approves Changes to Communications With the Public Rules, Trading Activity Fee

The Financial Industry Regulatory Authority (FINRA) announced that its Board of Governors has approved proposed changes to FINRA’s Communications With the Public Rules, as well as amendments to the Trading Activity Fee for firms with no customers that are engaged solely in proprietary trading activity for their own accounts.

The changes to the Communications With the Public Rules follow a retrospective rule review that was launched in April 2014, which was designed to assess their effectiveness and efficiency. The proposed rule changes are the first to be made to FINRA rules under the retrospective rule review program. FINRA will issue a Regulatory Notice in the coming months seeking comment on proposed changes to Rules 2210, 2213 and 2214.

“The proposed changes to FINRA’s Communications With the Public Rules will help ensure that these rules are meeting their intended investor-protection objectives by reasonably efficient means. FINRA also announced that it is proposing to tailor its Trading Activity Fee (TAF) to the business activities of proprietary trading firms with no customers,” said FINRA Chairman and CEO Richard Ketchum.

FINRA will issue Regulatory Notices soliciting public comment on a series of proposals, including:

Communications With the Public

The Board authorized FINRA to publish a Regulatory Notice requesting comment on proposed amendments that would eliminate certain filing requirements that present a low level of risk to investors, such as the filing requirements for generic investment company material and investment company shareholder reports, and make other changes to better align the requirements to the relative risks presented by specific types of sales material.

Trading Activity Fee

The Board authorized FINRA to publish a Regulatory Notice requesting comment on proposed amendments to the TAF for firms with no customers and are engaged solely in proprietary trading activity for their own accounts. The proposed amendments would exclude from the TAF those transactions executed on an exchange of which the firm is a member (including non-market-maker trades) provided the firm does not have customers and trades only for its own account. These proposed changes follow the SEC’s recent proposal to eliminate the registration exemption for proprietary trading firms that are members of exchanges but not FINRA.

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