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Registration Open for Next Small Firm Conference Call

November 4, 2020
Volume 44


  • Regulatory Notices
  • New FAQ
  • UPC Advisories

Upcoming Deadlines and Effective Dates
  • FINRA Requests for Comment
  • SEC Requests for Comment on FINRA Rules

Education and Compliance Programs

Registration is now open for the upcoming Small Firm Conference Call on Tuesday, November 17, at 4:30 p.m. ET. FINRA President and CEO Robert Cook and Vice President of Member Relations and Education Kayte Toczylowski will be joined by FINRA staff to discuss recent FINRA updates and technology changes including CE Transformation, FINRA Gateway and CAT.

Register today for the 2020 FINRA Artificial Intelligence (AI) Virtual Conference. The Virtual AI Conference, on November 9, is a half-day event to bring together regulators and industry leaders within the financial industry to discuss the use of AI and related opportunities and challenges. This event provides a platform for discussions on market and regulatory implications and related benefits and challenges associated with innovations occurring in the financial industry. Visit the webpage to view the conference brochure and register for the event.


FINRA Adopts Rule to Limit a Registered Person From Being Named a Customer’s Beneficiary or Holding a Position of Trust for or on Behalf of a Customer

FINRA adopted a new rule, outlined in Regulatory Notice 20-38, to limit any associated person of a member firm who is registered with FINRA from being named a beneficiary, executor or trustee, or to have a power of attorney or similar position of trust for or on behalf of a customer. New FINRA Rule 3241 (Registered Person Being Named a Customer’s Beneficiary or Holding a Position of Trust for a Customer) protects investors by requiring all member firms to affirmatively address registered persons being named beneficiaries or holding positions of trusts for customers. The rule requires the member firm with which the registered person is associated, upon receiving required written notice from the registered person, to review and approve or disapprove the registered person assuming such status or acting in such capacity.  The rule does not apply where the customer is a member of the registered person’s “immediate family.” Rule 3241 becomes effective February 15, 2021.

Broker-Dealer, Investment Adviser Firm, Agent and Investment Adviser Representative, and Branch Renewals for 2021

The 2021 Renewal Program begins on November 16, 2020, when FINRA makes the Preliminary Statements available to all firms in E-Bill. Preliminary Statements are not mailed to firms. Regulatory Notice 20-39 highlights the key dates in the renewal process. The deadline for full payment of Preliminary Statements is December 14, 2020.

New: Reporting Requirements Frequently Asked Questions

FINRA has updated the Rule 4530 (Reporting Requirements) FAQ to add two new FAQ (2.16 and 2.17) concerning certain types of written customer complaints.

UPC Advisories

The following UPC Advisories were published in the last week:

  • UPC #41-20: California Resources Corporation (CRCQQ)
  • UPC #42-20: Stage Stores, Inc. (SSINQ)

Upcoming Deadlines and Effective Dates

FINRA Requests for Comment

FINRA requests comment in Regulatory Notice 20-36 on a concept proposal regarding the application of FINRA rules to security-based swaps (SBS) following the SEC’s completion of its rulemaking regarding SBS dealers and major SBS participants. The comment period expires November 16, 2020.

FINRA requests comment in Regulatory Notice 20-33 on proposed formal procedures for bringing actions against non-associated persons who cheat or misbehave during a FINRA qualification examination. The proposed formal procedures—a new expedited proceeding rule—would also strengthen the existing processes for responding to cheating and misbehavior by associated persons during a FINRA qualification examination. FINRA also is proposing related amendments to FINRA’s registration requirements rule and eligibility proceedings rules. The comment period expires November 23, 2020.

FINRA requests comment in Regulatory Notice 20-34 on proposed amendments to Rule 2165 (Financial Exploitation of Specified Adults) to extend the hold period and to allow temporary holds on securities transactions to further address suspected financial exploitation of senior investors. The Notice also summarizes the retrospective rule review process, including the predominant themes that emerged from stakeholder feedback and resulting actions, and provides guidance to aid member firms and senior investors. The comment period expires December 4, 2020.

SEC Requests for Comment on FINRA Rules

The SEC requests comment on FINRA's proposal to amend the Code of Arbitration Procedure for Customer Disputes and the Code of Arbitration Procedure for Industry Disputes to increase arbitrator chairperson honoraria and certain arbitration fees. The comment period expires November 16, 2020. See the Federal Register notice

The SEC requests comment on FINRA’s proposal to modify TRACE dissemination protocols regarding Agency Pass-Through MBS and SBA-Backed ABS traded in Specified Pool Transactions. The comment period expires November 19, 2020. See the Federal Register notice.

FINRA Elections

FINRA has issued two Election Notices to notify firms of elections to fill vacancies on various FINRA Committees. Election Notice 10/20/20 notifies firms of elections for FINRA Regional Committees, and the mailing of ballots to eligible firms. As detailed in the Notice, the District 2 seats on the West Region Committee are the only contested seats. The second Election Notice 10/20/20 notifies FINRA small firm members of the process to fill one South and one Midwest Region vacancy on the Small Firm Advisory Committee (SFAC). Ballots are due by Thursday, November 19, 2020.


 Education and Compliance Programs

Now available: On demand sessions from FINRA's 2020 Virtual Diversity Summit. Throughout the week, more than 500 participants learned from expert diversity thought leaders as they led focused discussions on the importance of embracing diversity, equity and inclusion as a strategic business priority. If you missed it, free recordings of all sessions are now available.

Registration is open for the 2021 FINRA Institute at Georgetown Certified Regulatory and Compliance Professional (CRCP)® Program. Week I takes place on July 18-23, 2021, and Week II takes place on November 14-19, 2021.Take advantage of our new reduced registration rates and gain your CRCP designation.

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