The Financial Industry Regulatory Authority issued Regulatory Notice 09-22 requesting comment on its proposal to adopt new FINRA Rule 3210 in the Consolidated FINRA Rulebook in an effort to promote more effective oversight of the personal trading activities of associated persons of FINRA member firms. Proposed FINRA Rule 3210 combines and streamlines certain provisions of National Association of Securities Dealers Rule 3050 and New York Stock Exchange Rule 407 and adopts certain additional requirements.
Similar to NYSE Rule 407, proposed FINRA Rule 3210 will require associated persons of FINRA member firms to obtain the prior written consent of their employers before opening or otherwise establishing at another FINRA member firm (referred to as the executing member) or at any other financial institution any account in which securities transactions can be effected and in which such an associated person has a personal financial interest. The proposed rule would require associated persons to provide notice of their association with an employer member to executing members or other financial institutions, who would be prohibited from executing securities transactions in the associated person’s account without first obtaining the employer member’s written consent. Additionally, the proposed rule requires an employer member to instruct an associated person to have the executing member provide duplicate account statements and confirmations to the employer member. In replacing NASD Rule 3050 and corresponding provisions in NYSE Rule 407, proposed FINRA Rule 3210 also deletes a number of requirements of these rules that would be rendered outdated by the new rule or otherwise addressed elsewhere by new FINRA rules.
Comments must be received by FINRA by June 5.
Click here to read the FINRA Regulatory Notice