FINRA Board of Governors
Rulemaking Items for Discussion at the July 2011 Meeting
The FINRA Board of Governors will consider the following rulemaking items at its July 2011 meeting. After the July 14 meeting, FINRA will notify firms via email about the Board's actions on these items and anticipated next steps, if any.
Arbitration Claims Involving Collective Actions
The Board will consider a proposed amendment to Rule 13204 of the Code of Arbitration Procedure for Industry Disputes to add collective action claims so that such claims based on the Fair Labor Standards Act or the Age Discrimination in Employment Act may not be arbitrated under the Industry Code.
DPP/REIT Account Values
The Board will consider amendments to the customer account statement rule to revise the manner in which broker-dealers report estimated values of Direct Participation Programs (DPPs) and Real Estate Investment Trusts (REITs) on customer account statements.
Identifying Information Barriers in OATS
The Board will consider proposed amendments to FINRA rules to require member firms that rely on the "no-knowledge exception" in FINRA Rule 5320.02 to identify information barriers in place in reports submitted to the Order Audit Trail System (OATS).
Representing Customer Interest
The Board will consider proposed amendments to FINRA Rule 5210 that would require a member firm to have a customer order in hand before labeling a quotation or indication of interest (IOI) in any way that indicates the quotation or IOI represents interest the firm is displaying as agent on behalf of a customer. Under the proposed amendment, a firm could not continue to display such a quotation or IOI as representing a customer order once the customer order was executed or cancelled. The Board will also consider changes to modernize the application of the rule, broaden the rule text to include IOIs and conform application of the rule text to the restrictions in the rule's supplementary material.
Whistleblower Claims Under the Sarbanes-Oxley Act of 2002
The Board will consider a proposed amendment to provide that a whistleblower claim arising under the Sarbanes-Oxley Act of 2002 is not required to be arbitrated under the Code of Arbitration Procedure for Industry Disputes. Under the proposal, such a claim may be arbitrated only if the parties agree to arbitrate it after the dispute arises. The proposal includes a conforming amendment relating to required disclosures about arbitration procedures provided to associated persons signing or acknowledging a Form U4.