Private Securities Transactions Archives

FINRA Rule 3241: Registered Person as Customer’s Beneficiary

Challenges with Outside Business Activity Disclosures

Posted on October 22, 2020 by SCM Communications

An outside business activity (“OBA”) is defined as a registered person having any business activity outside the scope of the relationship with their member firm. As defined in FINRA Rule 3270, this may include acting as an employee, independent contractor, sole proprietor, officer, director, or partner for any other entities besides the member firm. Generally, the activity may also involve compensation or a reasonable expectation of compensation.

Disclosures and Attestations for Associated Persons

Posted on September 1, 2020 by SCM Communications

Associated person disclosures and attestations are not a “one size fits all” list of documents. The purpose of disclosures and attestations is to educate your employees on the expectations of the firm based on firm procedure and regulatory mandates. Another important purpose is to give representatives a chance to know relevant updates and changes that may require pre-approval and/or added compliance responsibilities.

OBAs and PSTs – FINRA’s Proposed Rule Change

Posted on June 26, 2019September 13, 2019 by SCM Communications

In May of 2017, FINRA released a Retrospective Rule Review 17-20 requesting comments on the effectiveness and efficiency of its Rule 3270, Outside Business Activities (“OBAs”) of Registered Persons, and Rule 3280, Private Securities Transactions (“PSTs”) of an Associated Person. Then, in February of 2018, FINRA issued Regulatory Notice 18-08 seeking additional comments on a proposed new rule, FINRA 3290, to consolidate current FINRA Rule 3270 and current FINRA Rule 3280. The proposed rule change is a result of FINRA’s retrospective rule review the year before. FINRA again sought comments on streamlining and bringing the rule up to date.

OBAs & PSTs: FINRA Seeks Comment on Proposed Rule

Posted on April 6, 2018October 12, 2018 by SCM Communications

Last spring, FINRA began a review of its rules regarding Outside Business Activities (OBAs) and Private Securities Transactions (PSTs). The review was meant to evaluate the efficiency and efficacy of FINRA Rule 3270 (Outside Business Activities of Registered Persons) and FINRA Rule 3280 (Private Securities Transactions of an Associated Person). FINRA concluded that while Rules 3270 and 3280 are fulfilling their intended purposes, they could benefit from changes to make the rules more contemporary and present-day and to better align the goal of protecting investors with the reality of the current regulatory landscape and business practices. Based on its findings, FINRA has proposed a new rule governing OBAs and PSTs, meant to replace the current rules and reduce unnecessary burdens on member firms.