FINRA Board of Governors

Rulemaking Items for Discussion at the April 2011 Meeting

 

The FINRA Board of Governors will consider the following rulemaking items at its April 2011 meeting. After the April 14 meeting, FINRA will notify firms via email about the Board's actions on these items and anticipated next steps, if any.

Code of Procedure
The Board will consider proposed amendments to improve the workability of the Code of Procedure. Among other changes, the proposed amendments would allow service of a complaint on counsel, permit the use of electronic mail for filing of papers and require an attorney to file a motion rather than a notice when seeking to withdraw. The Board also will consider a new provision that imposes a revolving-door restriction on former FINRA officers.  Former FINRA officers whose employment has been voluntarily terminated would be prohibited for one year from making a communication, appearing, or testifying as an expert witness on behalf of any respondent in a FINRA disciplinary proceeding or similar action. 

Governmental Accounting Standards Board Support Fee
Section 978 of the Dodd-Frank Wall Street Reform and Consumer Protection Act gives the SEC the authority to require FINRA to establish an annual accounting support fee to fund the annual budget of GASB and to draft the rules and procedures necessary to equitably assess the GASB Accounting Support Fee to member firms. Accordingly, the Board will consider a proposed new rule to establish a fee to fund the annual budget of the Governmental Accounting Standards Board (GASB Accounting Support Fee), which would be assessed based on a firm's municipal securities transactions. The fee will be proposed only if the SEC orders FINRA to adopt such a fee.

Mid-Case Arbitration Referrals
The Board will consider amendments to the pending mid-case referral proposal, which expressly permits arbitrators at any point during the arbitration proceeding to refer to FINRA what they had reason to believe are matters or conduct requiring immediate regulatory intervention to prevent serious harm to investors. The amendments would address concerns that the original proposal might adversely impact parties in arbitration cases in which an arbitrator made such a referral. 

MPIDs for Market Access Arrangements

The Board will consider proposed new rules to require firms to have a unique market participant identifier (MPID) for each third-party broker-dealer that the firm allows to access a market using an MPID assigned to the firm. The proposed new rules would also require that firms notify FINRA of the identity of the third-party broker-dealer using each MPID. FINRA's rules governing MPIDs are currently operating as pilot rules, and as part of the proposal, the Board will consider making these rules permanent.

Qualification Examination and Continuing Education Fees
The Board will consider amendments to Schedule A to the FINRA By-Laws to establish a fee for individuals who reschedule or cancel a qualification examination or continuing education session three to ten business days prior to the appointment date.

Trading Activity Fee Rate
The Board will consider a proposal to increase the rate for the Trading Activity Fee (TAF) on covered equity securities to compensate for regulatory revenue shortfalls due to materially reduced equity trading volumes.