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FINRA to Launch a New Public Comment Portal

July 8, 2020
Volume 27


  • Regulatory Notice
  • New FAQ
  • UPC Advisory

Upcoming Deadlines and Effective Dates
  • FINRA Requests for Comment
  • Annual Entitlement User Accounts Certification

Education and Compliance Programs

Tune in to the latest episode of the FINRA Unscripted podcast. On this episode, Meredith Cordisco and Jim Wrona of FINRA’s Office of General Counsel join the podcast to talk about the SEC’s Regulation Best Interest and what FINRA member firms can expect. Listen to the podcast.

FINRA encourages all eligible small and large firms to vote in the current FINRA Board of Governors election. FINRA will conduct its Annual Meeting of firms on Friday, August 7, 2020. The purpose of the meeting is to elect individuals to fill one small firm seat and one large firm seat on the FINRA Board of Governors. Firms that are members of FINRA as of the close of business on Tuesday, July 7, 2020, are eligible to vote. See Election Notice 7/8/20 for information about the voting methods and candidate profiles.

Reminder: sharing account credentials is strictly prohibited. As FINRA introduces multi-factor authentication (MFA) to access various FINRA applications, FINRA reminds all administrators and users that sharing account credentials to access FINRA systems is strictly prohibited by the Entitlement Program Terms of Use (Section 2A). An account must be used only by the person for whom it is created. This is an important measure to safeguard the data of customers, system users, registered persons and member firms. For more information, please visit FINRA’s MFA page.

FINRA to launch a new web portal for interested parties to submit comments in response to FINRA requests for comments. Available later this week, the web portal will provide an easily accessible option for the public to comment on FINRA proposals. Commenters will continue to have the ability to submit comments via email or mail.


FINRA Announces Updates to the Interpretations of FINRA’s Margin Rule Regarding Control and Restricted Securities and Consolidation of Accounts

FINRA Rule 4210 (Margin Requirements) prescribes requirements governing the extension of credit by members. The FINRA Rule 4210 interpretations provide further guidance regarding application of the rule. Regulatory Notice 20-22 announces, effective immediately, clarifications of interpretations of (1) FINRA Rule 4210(e)(8), which specifies margin requirements for control and restricted securities, and (2) FINRA Rule 4210(f)(5), which specifies conditions for the consolidation of two or more accounts carried for the same customer.

New FAQ About Exemption Reporting Under SEA Rule 15c3-3 for Purposes of FOCUS Reporting and Updating of Membership Agreements

The staff of the SEC’s Division of Trading and Markets has recently published new FAQ 18 in the “Frequently Asked Questions Concerning the Amendments to Certain Broker-Dealer Financial Responsibility Rules” and new FAQ 8, 8.1, 12, 12.1 and 12.2 in the “Frequently Asked Questions Concerning the July 30, 2013 Amendments to the Broker-Dealer Financial Reporting Rule.”  The new FAQ relate to a broker-dealer that does not meet any of the exemption conditions of paragraph (k) of SEA Rule 15c3-3 (i.e., paragraph (k)(1), (k)(2)(i) or (k)(2)(ii)), but also (1) does not directly or indirectly receive, hold, or otherwise owe funds or securities for or to customers, other than money or other consideration received and promptly transmitted in compliance with paragraph (a) or (b)(2) of SEA Rule 15c2-4; (2) does not carry accounts of or for customers; and (3) does not carry PAB accounts (as defined in Rule 15c3-3) (referred to in the SEC staff’s FAQ guidance as a “Non-Covered Firm”). In tandem with the SEC staff’s new guidance, FINRA is making available new FAQ, including an update to the eFOCUS FAQ, to assist firms that may have questions about their membership agreements and FOCUS Report filings in light of the SEC staff’s new guidance. Firms may contact their Risk Monitoring Analyst with any questions

UPC Advisory

The following UPC Advisory was published in the last week:

  • UPC #23-20: CARBO Ceramics, Inc. (CRRTQ)

 Upcoming Deadlines and Effective Dates

FINRA Requests for Comment

FINRA is inviting member firms that participate, or plan to participate, in the security-based swap (SBS) market to provide views and information with regard to broker-dealer SBS activities, including the application of FINRA rules to those activities. Any other interested party is also invited to submit views and information. For more information, including how to make a submission, please visit the FINRA website. FINRA would appreciate receiving responses by July 31, 2020.

FINRA encourages comments on its recent paper on Artificial Intelligence (AI) in the Securities Industry, including areas where guidance or modifications to FINRA rules may be desired to support adoption of AI applications while maintaining investor protection and market integrity. Comments are requested by August 31, 2020.

Annual Entitlement User Accounts Certification

FINRA's Annual User Accounts Certification Process is underway and will conclude July 20, 2020. During this period, Super Account Administrators (SAAs) for organizations with more than one user and/or administrator account must certify that individuals have the appropriate level of access to FINRA systems required to perform their job responsibilities or remove access if no longer required. This year, organizations with only an SAA account and no other users or administrators have the option to certify but are not required. For detailed information, refer to the Annual Entitlement User Accounts Certification Process page.


 Education and Compliance Programs

Save the date for the next Small Firm Conference Call on July 29, 2020 at 4:30 p.m. As a reminder, audio recordings of prior calls are made available to FINRA member firms. Register to listen to any session.

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