Proposed Rule Change to Address Firms with a Significant History of Misconduct
Financial Industry Regulatory Authority, Inc. (“FINRA”) is filing with the Securities and Exchange Commission (“SEC” or “Commission”) a proposed rule change to: (1) adopt FINRA Rule 4111 (Restricted Firm Obligations) to require member firms that are identified as “Restricted Firms” to maintain a deposit in a segregated account from which withdrawals would be restricted, adhere to specified conditions or restrictions, or comply with a combination of such obligations; and (2) adopt a new FINRA Rule 9561 (Procedures for Regulating Activities Under Rule 4111), and amend FINRA Rule 9559 (Hearing Procedures for Expedited Proceedings Under the Rule 9550 Series), to create a new expedited proceeding to implement proposed Rule 4111. In addition, FINRA proposes to adopt Capital Acquisition Broker (“CAB”) Rule 412 (Restricted Firm Obligations), to clarify that member firms that have elected to be treated as CABs would be subject to proposed FINRA Rule 4111, and to amend Funding Portal Rule 900(a) (Application of FINRA Rule 9000 Series (Code of Procedure) to Funding Portals), to clarify that funding portals would not be subject to proposed FINRA Rule 9561.
|Title||Format - Size||Status|
|Text of the Proposed Rule Change||PDF - 19.95 MB|
|Federal Register Notice||PDF - 1.61 MB|
|Extension No. 1||PDF - 52.99 KB|
|Response to Comments||PDF - 289.11 KB|
|Order Instituting Proceedings To Determine Whether To Approve or Disapprove||PDF - 231.52 KB|