Regulatory Notice 12-13

SEC Approves Consolidated FINRA Best Execution Rule

Effective Date: May 31, 2012

Executive Summary

The SEC approved FINRA’s proposed rule change to adopt FINRA Rules 5310 (Best Execution and Interpositioning) and 6438 (Displaying Priced Quotations in Multiple Quotation Mediums) in the consolidated rulebook (Consolidated FINRA Rulebook). FINRA Rule 5310 is the new consolidated rule governing members’ best execution requirements that is based largely on NASD Rule 2320 (Best Execution and Interpositioning). The Supplementary Material to Rule 5310 draws substantially from NASD IM-2320 (Interpretive Guidance with Respect to Best Execution Requirements) but includes several new provisions concerning securities with limited quotation or pricing information available, foreign securities, customer instructions on routing orders, and regular and rigorous review of execution quality. Rules 5310 and 6438 become effective on May 31, 2012. 

 

The text of FINRA Rules 5310 and 6438 are available in the online FINRA manual at www.finra.org/finramanual.

 

Questions concerning this Notice should be directed to Brant Brown, Associate General Counsel, Office of General Counsel, at (202) 728-6927.