FINRA Board of Governors

Rulemaking Items for Discussion at the February 2012 Meeting
The FINRA Board of Governors will consider the following rulemaking items at its February 2012 meeting. After the February 16 meeting, FINRA will notify firms via email about the Board's actions on these items and anticipated next steps, if any.

 

Agency Pass-Through Mortgage-Backed Securities and Securities Backed by Small Business Administration Transactions
The Board will consider amendments to the FINRA Rule 6700 Series (TRACE rules) to publicly disseminate transactions in agency pass-through mortgage-backed securities (agency pass-through MBS); and securities backed by Small Business Administration loans (SBA-backed ABS). The Board will also consider amendments to reduce the reporting period and set a dissemination cap for such transactions.

Deferred Compensation Arrangements and Filing Exemption for ETF Offerings

The Board will consider proposed amendments to the Corporate Financing Rule (FINRA Rule 5110), which governs underwriting terms and arrangements in public offerings of securities.  The amendments would broaden and clarify the acceptable use of rights of first refusal and termination fees that facilitate deferred compensation arrangements, while providing appropriate protections for issuers that dismiss underwriters for cause. The amendments also would eliminate a filing requirement that applies only to certain types of exchange-traded funds (ETFs) that are not registered investment companies.

Margin Requirements for Credit Default Swaps
The Board will consider proposed amendments to FINRA Rule 4240 governing an interim pilot program with respect to margin requirements for credit default swaps (CDS). The amendments would revise the rule to limit its application to CDS that are security-based swaps and make certain other conforming revisions.

Spinning
The Board will consider proposed amendments to refine and simplify the application of the spinning provisions in FINRA Rule 5131(b) with respect to purchases of new issues by certain funds of funds.