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We have updated this post! We are leaving this post up as to not disturb any saved links; however, please visit our more recent post, FINRA Rule 2111: Reasonable-Basis Suitability, for current information on the topic. FINRA Rule 2111 (Suitability) imposes three main suitability obligations on broker-dealers and their associated persons: Reasonable-Basis Suitability (a reasonable basis to believe, based on reasonable due diligence, that a recommendation is suitable at least for some investors) Customer-Specific Suitability (a reasonable basis to believe that a recommendation is suitable for the specific customer based on the customer’s investment profile Quantitative Suitability (a reasonable basis Read More....
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The SEC recently approved FINRA’s proposed rule change to adopt a new, consolidated rule governing accounts opened or established by associated persons at firms other than the firm at which they are employed. The rule change takes effect on April 3, 2017. FINRA Rule 3210 combines and streamlines longstanding provisions of the NASD and NYSE rules that address this area and, in combination with FINRA Rule 3110(d), which addresses securities transactions review and investigation, helps facilitate effective oversight of the trading activities of Associated Persons of member firms. Accounts that are required to be reported to an Associated Person’s employing Read More....
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In today’s culture, the utilization of social media for business purposes is becoming more and more commonplace and regular. You look at a Linked-In profile before scheduling someone for an interview. You follow FINRA and the SEC on Twitter and you review the Facebook page of Michael Bloomberg. Securities firms and their representatives are taking their business to social media, as well. However, before doing so, there are some important ramifications and requirements to consider. Firms must adopt and implement reasonable means of supervision and related controls when employing social media and permitting representatives to utilize it for business purposes. Read More....
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Is your firm trying to figure out how to accomplish compliance with mandatory training requirements before the year ends? MasterCompliance can help you with your training needs. FINRA rules dictate that all member firms provide adequate training for its registered representatives and principals on an annual basis. At a minimum, Firms must provide firm element training (FINRA Rule 1250(b)), anti-money laundering training (FINRA Rule 3310(e)), and hold an annual compliance meeting (FINRA Rule 3110(a)(7)). The purpose of firm element training is to keep registered representatives and principals up to date with on the job and product-related subjects. The purpose of Read More....
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On July 29, 2016, the SEC issued a no-action letter concerning an introducing broker-dealer’s obligation to promptly transmit customer checks to a carrying firm. This no-action letter provides limited relief from the requirement to promptly transmit customer checks payable to the carrying firm by noon the next business day. This relief, which is subject to a number of conditions, applies only if the introducing firm’s purpose for holding the check is to complete its account opening process in compliance with FINRA rules. FINRA has stated that this no-action letter applies to every introducing firm. Background Introducing firms are typically exempt Read More....
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In February 2016, the SEC approved amendments to MSRB Rule G-37, on political contributions and prohibitions on municipal securities business, and related amendments to MSRB Rules G-8 and G-9. On its effective date of August 17, 2016, the Rule G-37 amendments will extend the core standards under Rule G-37 to municipal advisors, their political contributions and the provision of municipal advisory business. The amendments are designed to address potential “pay-to-play” practices by municipal advisors consistently with the MSRB’s existing regulation of dealers. Specifically, amended MSRB Rule G-37 will extend the core standards under Rule G-37 to municipal advisors by: Prohibiting Read More....
