On July 31, the Financial Industry Regulatory Authority filed a proposed rule change with the Securities and Exchange Commission to adopt FINRA Rule 3210 (Accounts At Other Broker-Dealers and Financial Institutions) in the consolidated FINRA rulebook. The proposed rule, which combines and streamlines certain provisions of National Association of Securities Dealers (NASD) Rule 3050 and New York Stock Exchange Rules 407 and 407A, seeks to promote more effective oversight of the personal trading activities of associated persons of member firms.
Among other things, the proposed rule: (1) requires an associated person to obtain written consent of his or her employer (employer member) before opening certain accounts at another member firm (executing member) or other financial institution; (2) places an obligation on an associated person, prior to opening or otherwise establishing certain accounts, to notify in writing the executing member or other financial institution of his or her association with the employer member; and (3) requires an executing member, upon written request by the employer member, to transmit duplicate copies of confirmations and statements, or the transactional data contained therein, for certain accounts. The proposed rule also deletes a number of requirements in NASD Rule 3050 and NYSE Rules 407 and 407A that would be rendered outdated by the new rule or otherwise addressed elsewhere by FINRA rules.
Pending SEC approval, FINRA will announce the implementation date of the proposed rule change in a regulatory notice. Proposed FINRA Rule 3210 is available here.