On December 23, 2013, the Securities and Exchange Commission (SEC) approved proposed changes to the Financial Industry Regulatory Authority’s (FINRA) supervision rules. On March 19, 2014, FINRA issued Regulatory Notice 14-10, announcing that the consolidated supervision rules (the Consolidated Supervision Rules) approved by the SEC will become effective on December 1, 2014.1 The Consolidated Supervision Rules will replace existing NASD2 Rules 3010 and 3012 (the NASD Supervision Rules) in the FINRA Consolidated Rulebook with FINRA Rule 3110 (Supervision) and FINRA Rule 3120 (Supervisory Control System).3
Regulatory Notice 14-10 clarifies some important differences between the NASD Supervision Rules and the FINRA Consolidated Supervision Rules. Set forth below is a chart that highlights the key distinctions between the old and new rules.
Given the changes described above, chief compliance officers should consider the steps needed to implement the changes called for by the Consolidated Supervision Rules.