I appreciate the opportunity to comment on FINRA’s proposal to streamline the requirements governing outside business activities (OBAs) and private securities transactions (PSTs), as outlined in Regulatory Notice dated April 2025.
I would like to express my support for the proposed exclusions, particularly the exclusion of registered persons’ personal investments in non-securities from the rule’s coverage. This aspect of the Proposal reflects a pragmatic and risk-based approach that appropriately distinguishes between high-risk investment-related activities and routine personal financial decisions that do not pose significant risks to investors or member firms.
Requiring firms to monitor or review personal investments in non-securities—such as real estate purchases for personal use, or private, non-commercial investments—would impose undue compliance burdens without corresponding benefits to investor protection. These activities are typically unrelated to the registered person's role at a member firm and do not reasonably raise concerns of customer confusion or conflicts of interest. By excluding these low-risk activities, the Proposal enables firms to focus resources on higher-risk conduct that may directly impact investor confidence and market integrity.
The Proposal’s thoughtful exclusions, including those for immediate family transactions without selling compensation and activities conducted at affiliates, reflect FINRA’s careful consideration of efficiency, proportionality, and regulatory effectiveness. I commend FINRA for advancing a rule that maintains essential investor protections while reducing unnecessary compliance burdens on member firms and their associated persons.
Thank you for considering these comments, and for your continued efforts to modernize and refine the regulatory framework in a balanced and practical manner.
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Harry V Comment On Regulatory Notice 25-05
Dear Ms. Mitchell,
I appreciate the opportunity to comment on FINRA’s proposal to streamline the requirements governing outside business activities (OBAs) and private securities transactions (PSTs), as outlined in Regulatory Notice dated April 2025.
I would like to express my support for the proposed exclusions, particularly the exclusion of registered persons’ personal investments in non-securities from the rule’s coverage. This aspect of the Proposal reflects a pragmatic and risk-based approach that appropriately distinguishes between high-risk investment-related activities and routine personal financial decisions that do not pose significant risks to investors or member firms.
Requiring firms to monitor or review personal investments in non-securities—such as real estate purchases for personal use, or private, non-commercial investments—would impose undue compliance burdens without corresponding benefits to investor protection. These activities are typically unrelated to the registered person's role at a member firm and do not reasonably raise concerns of customer confusion or conflicts of interest. By excluding these low-risk activities, the Proposal enables firms to focus resources on higher-risk conduct that may directly impact investor confidence and market integrity.
The Proposal’s thoughtful exclusions, including those for immediate family transactions without selling compensation and activities conducted at affiliates, reflect FINRA’s careful consideration of efficiency, proportionality, and regulatory effectiveness. I commend FINRA for advancing a rule that maintains essential investor protections while reducing unnecessary compliance burdens on member firms and their associated persons.
Thank you for considering these comments, and for your continued efforts to modernize and refine the regulatory framework in a balanced and practical manner.