Update on progress with development of the FINRA Rulebook

An Important Message from Mary Schapiro, NASD Chairman and CEO


I wanted to provide you with an update on our progress with development of the FINRA Rulebook.

In our March 12 Information Notice, we outlined the process for developing a new, consolidated rulebook. An analysis of existing NASD and Incorporated NYSE rules has resulted in rules being grouped into one of three categories:

  • Rules that are obsolete or otherwise duplicative and should be repealed.
  • Rules that would benefit from being rewritten or from a tiered approach.
  • Rules that do not lend themselves as well to this type of analysis and are candidates to be transferred into the consolidated FINRA Rulebook without substantive modification.

The FINRA Board of Governors will determine on a case-by-case basis whether to file proposals directly with the SEC or first seek comment in a Regulatory Notice. The determination will be based on factors such as the subject matter of the proposal and the nature and extent of the proposed changes.

FINRA today published four Regulatory Notices requesting comment on the first phase of rules recommended for change. These rules address supervision and supervisory controls; books and records; financial responsibility; and investor education and protection. We encourage you to review these Notices and participate in the comment process.

In addition, FINRA is filing a number of rule proposals directly with the SEC. These filings will take place over the next couple of weeks. The first proposal, which will be filed shortly, addresses marketplace and procedural rules. If approved by the SEC, these rules would move without material change in terms of substance, and many rules would be renumbered and reorganized into a more logical and user-friendly framework. Once published in the Federal Register, firms can comment on these—and future—proposals through the SEC comment process.

To help you keep track of the various phases of the rulebook consolidation, we have created a special Web page that centralizes rulemaking activity for the FINRA Rulebook. I encourage you to visit the site at www.finra.org/rules/consolidation.

Stay tuned for more updates as we continue to make progress on the new rulebook.


Mary L. Schapiro