On October 30, FINRA announced the revision of the process by which member firms submit annual audited financial statements pursuant to Rule 17a-5(d) under the Exchange Act. Member firms, for which FINRA is the designated examining authority, will be required, pursuant to NASD Rule 3170, to submit their annual audit reports in electronic form. The new requirements will be effective November 8 and will be applicable to annual audit reports with a fiscal year end on or after September 30. FINRA Notice.
FINRA
FINRA Proposed Amendments to NASD Rule 2340
On September 29, FINRA proposed amendments to NASD Rule 2340 to address how firms report the per share estimated values of unlisted Direct Participation Programs and unlisted Real Estate Investment Trusts on customer account statements. Comments must be submitted by November 12. FINRA Notice.
FINRA Proposed Rule Change to Market-Wide Circuit Breaker Proposals
On September 27, FINRA filed a proposed rule change with the SEC to: (i) update Rule 6121 (Trading Halts Due to Extraordinary Market Volatility) to reflect changes to market-wide circuit breaker triggers for National Market System stocks and (ii) amend Rule 6440 (Trading and Quotation Halt in OTC Equity Securities) to provide specifically for a halt in trading in all OTC Equity Securities when a market-wide circuit breaker is in effect for NMS stocks. SEC Release. FINRA Proposed Rule.
FINRA Guidance on International Solicitation
On July 27, FINRA reaffirmed its guidance in Notice to Members (“NTM”) 00-02 concerning the obligation of firms and associated persons to comply with U.S. and non-U.S. laws when soliciting business in any non-U.S. jurisdiction. FINRA also formally withdrew NTM 98-91 regarding cold calling and advertising to persons in the United Kingdom due to changes in the jurisdiction’s legal and regulatory framework. FINRA Notice.
FINRA Rule on Operations Professional Continuing Education Requirement
On July 22, the SEC approved FINRA’s proposal to establish a registration category, and qualification examination and continuing education requirements for certain operational personnel. These requirements will be effective on October 17. FINRA Notice.
FINRA Increase in TAF Rate for Sales of Covered Equity Securities
On June 8, the SEC approved the increase by FINRA of the Trading Activity Fee (TAF) rate for sales of covered equity securities from $0.000075 per share to $0.000090 per share, with a corresponding increase to the per-transaction cap from $3.75 to $4.50. The new rate will be effective on July 1. FINRA Notice.
New FINRA Form T Submission Process
On June 3, FINRA announced a new process for electronic submission, through FINRA’s Firm Gateway, on Form T of last sale reports of OTC transactions in equity securities for which electronic submission is not possible, replacing submission via email. The new process will be effective by July 5. FINRA Release.
SEC Approves FINRA Rule for Fidelity Bonds
The SEC approved proposed FINRA Rule 4360 which updates fidelity bond requirements under NASD Rule 3020 and NYSE Rule 319. The new rule will become effective on January 1, 2012. FINRA Notice.
SEC Approves FINRA Amendments for ABS Reporting and Fee Rules
On May 10, the SEC approved proposed amendments to FINRA transaction reporting and notification requirements under FINRA Rule 6730 as well as to reporting fees under FINRA Rule 7730, relating to ABS and the method of calculating the Trading Activity Fee for such securities. These requirements will become effective on May 16. FINRA Notice.
FINRA Proposed Rule on Delaying Know Your Customer and Suitability Rules
On April 7, FINRA filed with the SEC a proposed rule to delay the implementation date for FINRA Rule 2090 (Know Your Customer) and FINRA Rule 2111 (Suitability) until July 9, 2012. Comments on the proposed rule must be submitted by May 4. FINRA Notice.