The Financial Industry Regulatory Authority released Regulatory Notice 16-03, which discusses the Securities and Exchange Commission’s approval of amendments to FINRA Rule 0150 (Application of Rules to Exempted Securities Except Municipal Securities). The amendments codify the application of FINRA Rule 2121 (Fair Prices and Commissions) and its Supplementary Material .01 and .02 (the “mark-up rule”) to exempted government securities transactions, including those involving US Treasury securities. FINRA noted that any mark-ups and/or commissions related to government securities transactions must comply with both the mark-up rule and FINRA Rule 2010 (Standards of Commercial Honor and Principles of Trade). The new amendments also provide criteria that firms can use when measuring and assessing the propriety of debt mark-ups, mark-downs and commissions related to such transactions.
FINRA Regulatory Notice 16-03 is available here.