Transmitting Customer Funds for Subscription-Way Transactions
On July 9, 2016, FINRA Rule 2341 (Investment Company Securities) superseded NASD Rule 2830 (Investment Company Securities). Some of you may recall that FINRA published Regulatory Notice 15-23 in June 2015 to provide broker-dealers with limited relief from NASD Rule 2830(m). A broker-dealer meeting certain conditions listed in that Regulatory Notice would be relieved from the requirement to promptly transmit customer funds received in connection with sales of securities on a subscription-way basis for the purpose of completing suitability reviews. A broker-dealer qualifying for this limited relief may hold a customer check payable to an issuer or an appropriate third-party payee acting on behalf of the issuer (for example, a transfer agent or custodian) for up to seven business days from the date that an office of supervisory Read More…