FINRA offers guidance on new requirements for educational communication related to recruitment practices and account transfers. FINRA published frequently asked questions regarding FINRA Rule 2273, which will require firms to deliver an educational communication to customers in connection with member firm recruitment practices and account transfers beginning on November 11, 2016. The FAQs address issues related to, among other things, the format of the communications, the delivery requirement, and the definition of “individualized contact” and “former customer.” (8/19/2016) FINRA FAQs.
FINRA will introduce new web-based system for the collection of short interest positions. FINRA announced that it will launch a new web-based interface for firms to submit short interest reports to FINRA. Firms will use the new system, which will be accessible via the Firm Gateway, starting on January 17, 2017. FINRA will make a test environment available to firms to assess any necessary program modifications beginning on October 3, 2016. (8/19/2016) FINRA Regulatory Notice 16-32.
FINRA announces annual meeting of firms. FINRA issued a notice informing members that the annual meeting of firms will take place on September 19, 2016. Firms will elect an individual to fill one small firm seat on the FINRA Board of Governors. FINRA emphasized that all small firms should be represented by proxy or in person at the meeting and encouraged firms to vote using one of several methods described in the notice. (8/19/2016) FINRA Election Notice.
NYSE updates guidance on trading floor conduct. The New York Stock Exchange LLC updated its Information Memo concerning its policies governing conduct on NYSE premises, including the trading floor. The revised Information Memo supersedes and replaces the version issued on June 1, 2016. (8/19/2016) NYSE Information Memo 16-11.
MSRB amends rules to shorten time frame for resolving open inter-dealer transactions. The MSRB announced recently approved amendments to MSRB Rule G-12, on uniform practice, which will shorten the time frame during which municipal securities dealers must resolve open inter-dealer failed transactions. Effective November 16, 2016, inter-dealer failed transactions must be closed out within 10 calendar days, with the possibility for a 10 calendar day extension at the buyer’s discretion. (8/19/2016) MSRB press release.
NFA modifies self-examination questionnaire. The National Futures Association has revised its Self-Examination Questionnaire for Futures Commission Merchants, Forex Dealer Members, Introducing Brokers, Commodity Pool Operators, and Commodity Trading Advisors to include a Forex Electronic Trading Systems section in the Supplemental Questionnaire for IBs and technical clarifications within the financial section of the Supplemental Questionnaire for CPOs. (8/15/2016) NFA press release.
FINRA provides overview of new margin requirements for Covered Agency Transactions. FINRA offered guidance on recently approved changes to FINRA Rule 4210 (Margin Requirements), which will, among other things, require FINRA to collect daily mark to market margin from all counterparties for their Covered Agency Transactions and enforce a written risk limit determination for each counterparty involved in a Covered Agency Transaction. The risk limit determination requirements will become effective on December 15, 2016, while all other amendments will become effective on December 15, 2017. (8/12/2016)FINRA Regulatory Notice 16-31.
NFA offers guidance to FCM and IB Members on new beneficial owner identification requirements. The NFA provided an overview of FinCEN’s final rules relating to customer due diligence requirements, which will require the NFA’s FCM and IB members to identify and verify the identity of beneficial owners of legal entity customers. The NFA indicated that it will amend NFA Compliance Rule 2-9 and a related Interpretative Notice entitled FCM and IB Anti-Money Laundering Program to reflect the requirements. (8/12/2016) NFA Notice I-16-17.
FINRA defines “time of execution” for reporting TRACE-eligible securities transactions. In a Regulatory Notice to firms about their obligation to report accurately the time of execution for transactions in TRACE-eligible securities, FINRA explained that the “time of execution” in these transactions generally refers to the time at which the parties to the transaction agree to all of the material terms sufficient to calculate the dollar price of the trade. (8/10/2016) FINRA Regulatory Notice 16-30.