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0180. Application of Rules to Security-Based Swaps

(a) Except as otherwise provided in this Rule, the Rules shall apply to members’ activities and positions with respect to security-based swaps.
(b) The following Rules shall not apply to members’ activities and positions with respect to security-based swaps:
(1) the FINRA Rule 6000 Series;
(2) the FINRA Rule 7000 Series; and
(3) the FINRA Rule 11000 Series.
(c) The following Rules shall not apply to members’ activities and positions with respect to security-based swaps, to the extent that the member is acting in its capacity as a registered security-based swap dealer or major security-based swap participant or the associated person of the member is acting in his or her capacity as an associated person of a registered security-based swap dealer or major security-based swap participant, as applicable, and that such activities or positions relate to the business of the registered security-based swap dealer or major security-based swap participant within the meaning of SEA Rule 15Fh-3(h)(1):
(1) FINRA Rule 2210(d);
(2) FINRA Rule 2232;
(3) FINRA Rule 3110;
(4) FINRA Rule 3120; and
(5) FINRA Rule 3130.
(d) The following Rules shall not apply to members’ activities and positions with respect to security-based swaps, to the extent that the member is acting in its capacity as a registered security-based swap dealer or the associated person of the member is acting in his or her capacity as an associated person of a registered security-based swap dealer, as applicable, and that such activities or positions relate to the business of the registered security-based swap dealer within the meaning of SEA Rule 15Fh-3(h)(1):
(1) FINRA Rule 2030;
(2) FINRA Rule 2090; and
(3) FINRA Rule 2111.
(e) The following Rules shall not apply to members’ activities and positions with respect to security-based swaps, to the extent that the member or the associated person of the member, as applicable, is arranging, negotiating or executing security-based swaps on behalf of a non-U.S. affiliate pursuant to, and in compliance with the conditions of, the exception from counting certain security-based swaps under SEA Rule 3a71-3(d)(1):
(1) FINRA Rule 2111;
(2) FINRA Rule 2210(d); and
(3) FINRA Rule 2232.
(f) The following Rules shall not apply to members’ activities and positions with respect to security-based swaps, to the extent that the member is acting in its capacity as a registered security-based swap dealer or major security-based swap participant and the customer’s account solely holds security-based swaps and collateral posted as margin in connection with such security-based swaps, provided that the member complies with the portfolio reconciliation requirements of SEA Rule 15Fi-3 with respect to such account and that such portfolio reconciliations include collateral posted as margin in connection with security-based swaps in the account:
(1) FINRA Rule 2231; and
(2) FINRA Rule 4512.
(g) Persons associated with a member whose functions are related solely and exclusively to security-based swaps undertaken in such person’s capacity as an associated person of a registered security-based swap dealer or major security-based swap participant are not required to be registered with FINRA.
(h) For purposes of the FINRA Rule 4000 Series, all requirements that apply to a member that clears or carries customer accounts shall also apply to any member that acts as a principal counterparty to a security-based swap, clears or carries a security-based swap, guarantees a security-based swap or otherwise has financial exposure to a security-based swap.
(i) Pursuant to the FINRA Rule 9600 Series, FINRA may, taking into consideration all relevant factors, exempt a person unconditionally or on specified terms from the application of specific FINRA Rules (other than an exemption from the general application of paragraph (a) of this Rule) to the person’s security-based swap activities or positions as it deems appropriate consistent with the protection of investors and the public interest.

• • • Supplementary Material: --------------

.01 Definition of Security-Based Swaps. For purposes of this Rule, "security-based swap" shall be as defined pursuant to Exchange Act Section 3(a)(68) and the rules and guidance of the SEC or its staff.

Amended by SR-FINRA-2021-008 eff. Feb. 6, 2022.
Amended by SR-FINRA-2021-021 eff. Sept. 1, 2021.
Amended by SR-FINRA-2020-001 eff. Feb. 12, 2020.
Amended by SR-FINRA-2019-001 eff. Feb. 12, 2019.
Amended by SR-FINRA-2018-001 eff. Feb. 12, 2018.
Amended by SR-FINRA-2017-001 eff. Feb. 11, 2017.
Amended by SR-FINRA-2016-001 eff. Feb. 11, 2016.
Amended by SR-FINRA-2015-001 eff. Feb. 11, 2015.
Amended by SR-FINRA-2014-001 eff. Feb. 11, 2014.
Amended by SR-FINRA-2013-019 eff. July 17, 2013.
Amended by SR-FINRA-2012-056 eff. Dec. 12, 2012.
Amended by SR-FINRA-2012-004 eff. Jan. 13, 2012.
Adopted by SR-FINRA-2011-033 eff. July 8, 2011.

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