Regulatory Notice 08-23

Proposed Consolidated FINRA Rules Governing Financial Responsibility; Comment Period Expired: June 13, 2008

Executive Summary

As part of the process to develop a new consolidated rulebook (the Consolidated FINRA Rulebook),1 FINRA is requesting comment on a proposed set of financial responsibility rules (the proposed rules). Proposed FINRA Rules 4110, 4120, 4130, 4140 and 4521 would be new, consolidated rules based in part on existing NASD and Incorporated NYSE Rules2 and would govern members' financial responsibility requirements. Proposed FINRA Rules 9557 and 9559 would revise NASD Rules 9557 and 9559, respectively, and would afford members served with a notice under the financial responsibility rules an expedited appeal process. (In addition, FINRA would make conforming revisions to Section 4(g) of Schedule A to the FINRA By-Laws.)

The text of the proposed rules is set forth in Attachment A. The chart in Attachment B summarizes the applicability of the proposed rules to member firms.

Questions regarding this Notice should be directed to:

 

• Kris Dailey, Vice President, Risk Oversight & Operational Regulation, at (646) 315-8434;
• Susan M. DeMando, Associate Vice President, Financial Operations Policy, at (202) 728-8411; or
• Adam H. Arkel, Assistant General Counsel, Office of General Counsel, at (202) 728-6961.

 

1 The current FINRA rulebook consists of two sets of rules: (1) NASD Rules and (2) rules incorporated from NYSE (Incorporated NYSE Rules). The Incorporated NYSE Rules apply only to those members of FINRA that are also members of the NYSE (Dual Members). Dual Members also must comply with NASD Rules. For more information about the rulebook consolidation process, see FINRA Information Notice, March 12, 2008 (Rulebook Consolidation Process).

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