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FINRA’s Board of Governors Approves Two Rule Proposals

The Financial Industry Regulatory Authority’s (FINRA) Board of Governors approved two rule proposals at a meeting held on December 4–5, to be filed with the Securities and Exchange Commission.

One of the proposals would amend FINRA rules governing suitability and non-cash compensation to address inconsistencies with SEC Regulation Best Interest and to mitigate potential confusion over which standards will apply with respect to recommendations to retail customers.

The other proposal deals with obligations that could be imposed on broker-dealers that are identified as a restricted firm by FINRA through a multi-step process. Such obligations include a requirement to maintain a deposit in a segregated account from which withdrawals would be restricted, adhere to specified conditions or restrictions, or comply with a combination of such obligations.

The proposals will be filed with the SEC and will be published for public comment before being approved by the SEC.

The news release regarding the Board of Governors’ meeting is available here.

©2020 Katten Muchin Rosenman LLP

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About this Author

Susan Light, Katten Law Firm, Finance Law Attorney, New York
Partner

Susan Light focuses her practice on financial services regulatory matters. She counsels broker-dealers, hedge funds, investment banks and financial services clients on enforcement issues involving the Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (FINRA), other self-regulatory organizations (SROs) and state and federal regulatory authorities. She has particular experience related to sales practice issues, financial and operational issues, anti-money laundering, crowdfunding, cybersecurity, and cryptocurrencies.

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212-940-8599
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 Commission, the US Commodity Futures Trading Commission and financial industry self-regulatory organizations. 

312-902-5452
Associate

Adam Haft is an associate in the Financial Services practice.

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New York

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