On March 23, the Financial Industry Regulatory Authority (FINRA) announced it is conducting a retrospective review of FINRA Rule 4311, governing carrying agreements. As part of its review, FINRA has requested comment to determine the Rule’s effectiveness and efficiency.
The Rule governs requirements applicable to FINRA members when entering into agreements for the carrying of customer accounts. It prohibits FINRA members, unless otherwise permitted by FINRA, from entering into an agreement for the carrying of any customer account in which securities transactions can be effected unless the carrying firm is a FINRA member. The Rule also requires that the carrying firm receive approval from FINRA prior to any such agreement becoming effective.
The comment period expires May 23.
More information is available here.