Update: FINRA Board of Governors Meeting
March 8, 2017
Dear Executive Representative:
The FINRA Board of Governors concluded its regular meeting this week, so I would like to share with you an update regarding the actions taken, which are outlined below and addressed in the Board video report. I would also like to take this opportunity to bring to your attention a Special Notice that FINRA will issue soon.
Our goal in issuing the Special Notice is to solicit input from various stakeholders regarding how we can enhance FINRA’s transparency and engagement activities, particularly our advisory committees and rulemaking processes.
The Notice is the first stage of a new initiative to evaluate various aspects of FINRA’s operations and programs, with subsequent phases expected to address other parts of our regulatory operations.
As a self-regulatory organization, FINRA benefits from—indeed, depends upon—our effective engagement with member organizations and other stakeholders. Your feedback is vital toward ensuring that we are operating as the best regulator that we can be.
We look forward to your responses to the questions posed in the Notice.
Robert W. Cook
President and CEO
Rulemaking Items Discussed at the March 2017 Board Meeting
The Board authorized FINRA to publish a Regulatory Notice soliciting comment on proposed amendments to Rule 5110 (Corporate Financing Rule—Underwriting Terms and Arrangements) to streamline and modernize the rule. The amendments would simplify and clarify a range of provisions in the following areas: (1) filing requirements; (2) filing exemptions; (3) disclosure requirements; (4) underwriting compensation; (5) lock-up restrictions; (6) valuation of securities; (7) prohibited terms and arrangements; and (8) defined terms.
Late Cancellation of Prehearing Conferences in Arbitration
The Board authorized FINRA to file with the SEC proposed amendments to its arbitration rules to charge the parties to an arbitration a $100 per-arbitrator fee if a prehearing conference is cancelled at the request of one or more parties within three business days before a scheduled prehearing conference. The proposal would also pay a $100 honorarium, funded by the $100 per-arbitrator late fee, to each arbitrator who was scheduled to attend a prehearing conference that is cancelled.
TRACE Data Products
The Board authorized FINRA to file with the SEC proposed amendments to Rule 7730 (Trade Reporting and Compliance Engine) to provide for two new data offerings: (1) a Security Activity Report, which will provide aggregated statistics by security for TRACE-eligible corporate and agency bonds; and (2) an End-of-Day Transaction File, which will provide an alternative means of receiving daily disseminated transaction information in an end-of-day file.