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December 2015 Board Update

FINRA Chairman and CEO Rick Ketchum, Lead Governor Jack Brennan and Finance Committee Chairman Jim Weddle review rulemaking and other issues discussed at FINRA's December Board of Governors meeting. In addition to the video, a summary of the board actions is also available.

December 15, 2015

Dear Executive Representative:

This week, the FINRA Board of Governors met to discuss a number of items, including four rule proposals. A summary of the proposals, as approved by the Board, is included below.

Please take a moment to watch the video report, in which Lead Governor Jack Brennan, Finance Committee Chair Jim Weddle and I provide an overview of key issues discussed at the meeting.


Richard Ketchum Signature
Richard G. Ketchum
Chairman and CEO


Rulemaking Items Discussed at the December 2015 Board Meeting

ATS Block Data
The Board authorized FINRA to file with the SEC a proposed amendment to Rule 6110 (Trading Otherwise than on an Exchange) to publish monthly aggregate Alternative Trading System (ATS) block trading statistics on FINRA’s website. FINRA will publish the information for each ATS aggregated across all NMS stocks. The information would be for a minimum time period of one month of trading and would be published no earlier than one month following the end of the month for which trading was aggregated. FINRA will announce the thresholds for what constitutes a “block trade” in a Regulatory Notice.

Award Offsets in Arbitration
The Board authorized FINRA to file with the SEC proposed amendments to Rules 12904 and 13904 of the Customer and Industry Codes of Arbitration Procedure, respectively, to provide that absent specification to the contrary in an award, when arbitrators order opposing parties to pay each other damages, the monetary awards shall offset, and the party that owes the larger amount shall pay the net difference.  

Qualification and Registration
The Board authorized FINRA to file with the SEC a proposal to restructure the representative-level qualification examinations. Specifically, the proposal would (1) restructure the current representative-level qualification examination program into a more efficient format whereby all potential representative-level registrants would take a general knowledge examination called the Securities Industry Essentials™ Examination (SIE™) and a tailored, specialized knowledge examination for their particular registered role; (2) develop and implement the related examination content outlines; and (3) eliminate several representative-level registration categories and associated examinations that have become outdated or have limited utility.

The Board also authorized FINRA to file with the SEC a proposal to adopt a waiver program whereby individuals working for a financial services industry affiliate of a member firm would be granted a waiver of their requalification requirements, provided they satisfy specified conditions.

Shortening the Settlement Cycle
The Board authorized FINRA to take actions necessary to support industry initiatives to shorten the settlement cycle for U.S. securities transactions in the secondary markets from trade date plus three (T+3) to trade date plus two (T+2), in concert and conformity with the rule changes and implementation cycle adopted by the SEC, other self-regulatory organizations and market participants, including the publication of a Regulatory Notice seeking comment on the proposed rule changes and making all necessary filings with the SEC.