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MSRB Rule G-47, as it relates to time of trade disclosure, requires firms to disclose, at or prior to the time of trade, all material information known about the transaction, as well as material information about the municipal security that is reasonably accessible to the market. The MSRB has previously provided interpretive guidance on specific types of information that is material where specific scenarios occur and requires time of trade disclosure, and recently published a notice to state its interpretation that the fact that a municipal security bears market discount is material information that must be disclosed to a customer Read More....
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The Securities and Exchange Commission (SEC) has approved a National Market System (NMS) plan to create a comprehensive database of all trading activity in the U.S. equity and options markets. This database is known as the Consolidated Audit Trail (CAT). Proposed by FINRA and the national security exchanges to comply with new regulations related to broker-dealer compliance, specifically SEC Rule 613, the NMS plan details the methods by which self-regulatory organizations (SROs) and broker-dealers will record and report market information. The supplied data will provide the complete lifecycle of all orders andtransactions for all exchange-listed equities and options across all Read More....
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FINRA is soliciting comment on a proposal to provide for a FINRA-sponsored inter-dealer quotation facility for all OTC equity securities. Over the past several years, there have been instances in which market-wide trading halts for all OTC equity securities have been put into effect by FINRA out of concern regarding a substantial lack of transparency due to limited quotation information for these securities. These trading halts followed system failures on an inter-dealer quotation system. While FINRA declared market-wide trading halts in these previous instances of systems failures, FINRA believes that market-wide trading halts should be avoided, and is proposing to Read More....
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[Continued from Communications with the Public – Part I] Investment Analysis Tools Pursuant to FINRA Rules 2210(c)(3)(C) and 2214(a), firms that intend to offer an investment analysis tool must file templates for written reports produced by, or retail communications concerning, the tool, within 10 business days of first use. Rule 2214 also requires firms to provide FINRA with access to the tool itself, and provide customers with specific disclosures when firms communicate about the tool, use the tool or provide written reports generated by the tool. Since Rule 2214 became effective in 2005, FINRA has found that firms have largely Read More....
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In April 2014, FINRA began a review of its communications with the public rules to assess their effectiveness and efficiency. FINRA later published a report concluding that, while the rules have met their intended investor protection objectives, they could benefit from some updating to better align the investor protection benefits and the economic impacts. To this end, the SEC recently approved amendments to certain FINRA rules governing communications with the public effective January 9, 2017. The amendments revise the filing requirements in FINRA Rule 2210 and FINRA Rule 2214 and the content and disclosure requirements in FINRA Rule 2213. Below Read More....
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Firms that use the Alternative Display Facility (ADF) to report over-the-counter trades in NMS stocks for broker-dealer compliance management purposes can choose to have their trades submitted by the ADF to the National Securities Clearing Corporation (NSCC) for clearance and settlement. Designated trades can be locked-in via agreement by both parties to the trade (the Uniform Services Agreement and/or the Qualified Special Representative Agreement). Alternatively, designated trades can be locked-in by the system in accordance with FINRA’s rules and regulations for broker-dealers. Lock-in of trades designated for clearing must occur in one of those two ways. Section (a) of FINRA Read More....
