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April 16, 2014

Financial Industry Regulatory Authority (FINRA) Offers Changes to Proposed Rules Governing Markups, Commissions and Fees

In February 2011, the Financial Industry Regulatory Authority initially sought comment on proposed rules governing markups, commissions and fees. The initial proposal sought to eliminate the 5% rule for markups and markdowns. In response to the comments received, FINRA has offered several changes to the proposed rules. Among other things, the changes include retention of the 5% rule for markups and markdowns, modification of the relevant factors used to determine the reasonableness of markups and commissions, elimination of the requirement to provide commission schedules for equity securities transactions to retail customers and extension of the proposed markup rules to transactions in certain government securities. FINRA requests comment on the revised proposal. Comments must be received by April 1, 2013.

Click here for the FINRA notice.

©2014 Katten Muchin Rosenman LLP

About the 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.

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About the Author

Staff Attorney

Tanja Samardzija concentrates her practice in financial services. Ms. Samardzija began her legal career as a litigator before embarking on a career in market regulation at the Chicago Board Options Exchange (CBOE). Ms. Samardzija’s work at the CBOE has familiarized her with a wide variety of regulatory matters including exchange and SEC investigations; compliance issues related to registrations, market making and options order handling; and risk management controls and supervisory procedures for brokers or dealers with market access. In addition to being thoroughly involved in...

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