August 21, 2019

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FINRA Proposes Rule Change Relating to Exemptions from Order Audit Trail System Recording and Reporting Requirements

On July 12, the Financial Industry Regulatory Authority (FINRA) filed with the Securities and Exchange Commission a proposed rule change (Rule Change) to amend FINRA Rule 7470, which provides certain member firms with an exemption from certain order recording and data transmission requirements. The Rule Change extends for three years FINRA’s ability to exempt certain member firms from the recording and reporting requirements of the Order Audit Trail System Rules for manual orders received by such members. The Rule Change is intended to extend the exemption period such that it more closely syncs with the December 2021 deadline for all broker-dealers that are FINRA members or members of a national securities exchange to report order information to the Consolidated Audit Trail.

Pursuant to Section 19(b)(3) of the Securities Exchange Act of 1934, as amended, and Rule 19b-4 thereunder, the Rule Change was effective upon filing.

The text of the Rule Change is available here.

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About this Author

Michael T. Foley, Katten, Lawyer, Finance, FINRA, Chicago
Special Counsel

Michael Foley represents broker-dealers, investment advisers and other financial services industry participants with respect to a broad spectrum of legal and regulatory matters arising under the federal securities laws.

Michael has nearly 20 years of experience in private practice and in-house at both a large, full-service broker-dealer and at an online discount broker-dealer, advising broker-dealers and other financial institutions regarding compliance with the federal securities and commodities laws, and with the regulations of the US Securities and Exchange...

312-902-5452
Stanley V. Polit, Katten Muchin, Financial Services lawyer, Corporate Regulatory Matters Attorney
Associate

Stanley Polit concentrates his practice in transactional, corporate and regulatory aspects of financial services matters. Stan is able to provide legal services to a wide variety of clients including proprietary trading firms, hedge funds, broker-dealers, registered investment advisers, commodity trading advisers, financial institutions and general corporate clients.

Prior to joining Katten, Stan served as a council member for a national crisis management firm, where he specialized in crisis communication and merged media strategies. He has lectured extensively and conducted trainings related to these topics at numerous national and international conferences, including the National Communication Association's National Convention, the International Crisis and Risk Communication Conference and the Disaster Recovery Journal's World Business Continuity Conference.

312.902.5420