Regulatory Notice 10-15

FINRA Requirements for Subordinations; Availability of New Standard Forms

Executive Summary

Firms are reminded that, pursuant to new FINRA Rule 4110(e)(1), subordinated loans and notes collateralized by securities (together referred to as subordinations) must be approved by FINRA in order to receive beneficial regulatory capital treatment. This Notice explains the requirements for all subordinations for which firms intend to receive beneficial regulatory capital treatment, including certain provisions that all such subordinations, both standard and non-standard, must contain. It also describes the submission and approval process of proposed subordinations.

 

In addition, the Notice provides information about new, standard subordination forms (and a revised Lender's Attestation) that are available at www.finra.org/subordinations. This Notice also explains how to obtain approval of proposed amendments to or renewals of previously approved subordinations.

 

Questions concerning this Notice should be directed to:

  • Kris Dailey, Vice President, Risk Oversight & Operational Regulation (ROOR), at (646) 315-8434;
  • Susan DeMando Scott, Associate Vice President, Financial Operations Department, at (202) 728-8411;
  • Joseph Sheirer, Director & Special Counsel, ROOR, at (646) 315-8691; or
  • Maria Rabinovich, Principal Counsel, ROOR, at (646) 315-8461.