The Financial Industry Regulatory Authority’s (FINRA) Board of Governors approved two rule proposals at a meeting held on December 4–5, to be filed with the Securities and Exchange Commission.
One of the proposals would amend FINRA rules governing suitability and non-cash compensation to address inconsistencies with SEC Regulation Best Interest and to mitigate potential confusion over which standards will apply with respect to recommendations to retail customers.
The other proposal deals with obligations that could be imposed on broker-dealers that are identified as a restricted firm by FINRA through a multi-step process. Such obligations include a requirement to maintain a deposit in a segregated account from which withdrawals would be restricted, adhere to specified conditions or restrictions, or comply with a combination of such obligations.
The proposals will be filed with the SEC and will be published for public comment before being approved by the SEC.
The news release regarding the Board of Governors’ meeting is available here.