Upcoming Deadlines and Effective Dates
FINRA Requests for Comment
FINRA requests comment in Regulatory Notice 20-29 on the practice of “pennying” in the corporate bond market. Consistent with a recommendation from the SEC’s Fixed Income Market Structure Advisory Committee (FIMSAC) and a similar request for comment published by the Municipal Securities Rulemaking Board (MSRB), FINRA is soliciting comment on how to define or identify pennying, how pennying impacts market quality and whether further regulatory action would be appropriate. The comment period expires October 16, 2020.
SEC Request for Comment on FINRA Rules
The SEC requests comment on FINRA’s proposal to eliminate the Order Audit Trail System (‘‘OATS’’) rules in the FINRA Rule 7400 Series and FINRA Rule 4554 (Alternative Trading Systems—Recording and Reporting Requirements of Order and Execution Information for NMS Stocks) once members are effectively reporting to the Consolidated Audit Trail (‘‘CAT’’) and the CAT’s accuracy and reliability meet specified standards. The comment period expires September 22, 2020. See the Federal Register notice.
Upcoming Effective Date
FINRA has amended its Rule 5110 (Corporate Financing Rule - Underwriting Terms and Arrangements) to make substantive, organizational and terminology changes to the rule, outlined in Regulatory Notice 20-10. The amendments to Rule 5110 modernize, simplify and clarify its provisions while maintaining important protections for market participants, including issuers and investors participating in public offerings. The implementation date for amended Rule 5110(a)(3)(A), (a)(4)(A)(ii) and (a)(4)(A)(iii) was March 20, 2020. The implementation date for all other provisions in amended Rule 5110 is September 16, 2020.
Election Notice 8/17/2020 notifies members of an upcoming election to fill two large firm seats and one small firm seat on the National Adjudicatory Council (NAC), and to announce the FINRA Nominating & Governance Committee nominees for these vacancies. Eligible individuals not nominated by the Nominating Committee who obtain the requisite number of valid petitions may be included as candidates on the ballot by following the petition procedures described in the Notice. Petitions for candidacy are due October 1, 2020.
Election Notice 9/1/2020 informs small FINRA member firms of the upcoming Small Firm Advisory Committee (SFAC) election. Two seats on the SFAC are up for election, one representing the South region and one representing the Midwest region. Any eligible candidate who wants to be included on the ballot must submit the relevant information via the candidate profile form to FINRA’s Office of the Corporate Secretary by October 1, 2020.