October 23, 2014

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Financial Industry Regulatory Authority (FINRA) Amends Stop and Stop Limit Order Rules

The Securities and Exchange Commission approved new Financial Industry Regulatory Authority Rule 5350, which replaces the stop order provisions in FINRA Rule 6140(h). Under new FINRA Rule 5350, firms may accept stop orders and stop limit orders. Additionally, the new rule allows firms to offer alternative orders with different types of triggers, such as a quotation at the stop price, but the order type must be labeled in a way that is clearly distinguishable from a stop order or a stop limit order. The new rule applies to National Market System securities and over-the-counter equity securities.

More information is available here.

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About this Author

James D. Van De Graaff, Katten Muchin Law Firm, Financial Institutions Attorney
Partner

James D. Van De Graaff primarily represents broker-dealers, investment banks and market-making firms in the regulatory aspects of their business. He has more than 20 years of experience representing financial services clients in compliance reviews and training, mergers and acquisitions and responding to inquiries or investigations involving the US Securities and Exchange Commission (SEC) and securities self-regulatory organizations.

312-902-5227
James M. Brady, Katten Muchin Law Firm, Finance Attorney
Associate

James Brady concentrates his practice in financial services matters.

312-902-5362