Customer Complaints (FINRA Rule 4513)

Customer Complaints (FINRA Rule 4513)

FINRA Rule 4513 defines a “customer complaint” as any grievance by a customer or any person authorized to act on behalf of the customer involving the activities of the member or a person associated with the member in connection with the solicitation or execution of any transaction or the disposition of securities or funds of that customer. Customer complaints that are made in person or over the phone are not within the scope of this rule, however, it is still prudent for members to address these complaints so that they do not escalate further. If a complaint is resolved to Read more about Customer Complaints (FINRA Rule 4513)[…]

Outside Business Activity Disclosure Form Best Practices

Outside Business Activity Disclosure Form Best Practices

When creating an outside business activity (“OBA”) disclosure form, it’s important to understand how FINRA defines an outside business activity and what information must be disclosed. Firms can request additional information however it is recommended that Firm’s ensure the required information is collected, reviewed and approved by the Firm’s designated principal. What is an Outside Business Activity? An outside business activity (“OBA”) is defined as a registered person acting as an “employee, independent contractor, sole proprietor, officer, director or partner of another person, or be compensated, or have the reasonable expectation of compensation, from any other person as a result Read more about Outside Business Activity Disclosure Form Best Practices[…]

FINRA Announces Rule 4111 (Restricted Firm Obligations) Evaluation Date

FINRA Announces Rule 4111 (Restricted Firm Obligations) Evaluation Date

In an Information Notice released February 1, 2022, FINRA announced the first “Evaluation Date” for the new Rule 4111 (Restricted Firm Obligations) on June 1, 2022. Rule 4111 went into effect on January 1, 2022, and addresses firms with a significant history of misconduct. More specifically, it requires member firms that are identified as Restricted Firms to deposit cash or qualified securities in a segregated, restricted account; adhere to specified conditions or restrictions; or comply with a combination of such obligations. Rule 4111 Rule 4111 establishes a multi-step, annual process through which FINRA will determine whether a member firm raises Read more about FINRA Announces Rule 4111 (Restricted Firm Obligations) Evaluation Date[…]

Changes to FINRA Rule 2165: Financial Exploitation of Specified Adults

Changes to FINRA Rule 2165: Financial Exploitation of Specified Adults

FINRA has adopted amendments to Rule 2165 (Financial Exploitation of Specified Adults) to permit member firms to: (1) place a hold on a securities transaction (in addition to the already-permitted hold on a disbursement of funds or securities) where there is a reasonable belief of financial exploitation; and (2) extend a temporary hold on a disbursement or transaction for an additional 30 business days, beyond the current maximum of 25 business days (for a total of 55 business days), if the member firm has reported the matter to a state regulator or agency, or a court of competent jurisdiction. The Read more about Changes to FINRA Rule 2165: Financial Exploitation of Specified Adults[…]

Amendments to FINRA Rules for Security-Based Swaps

Amendments to FINRA Rules for Security-Based Swaps

In an effort to clarify the rules regarding security-based swaps (SBS), FINRA has adopted amendments to rules 0180, 4120, and 4220. FINRA had previously adopted temporary relief from the application of most FINRA rules to SBS (Rule 0180), in tandem with temporary exemptive orders issued by the SEC relating to the definition of SBS as securities, as well as an interim pilot program with respect to margin requirements for transactions in CDS held in an account at a member (Rule 4240). These rules expire on February 6, 2022, and April 6, 2022, respectively. Amendments to Rule 0180 FINRA has adopted Read more about Amendments to FINRA Rules for Security-Based Swaps[…]