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FINRA Trying Again on Controversial Rules

The Doss Firm

On February 14, 2013, FINRA sent an email to member firms that detailed its plan to reissue a package of controversial membership rules. The email stated that FINRA board had approved issuing a revised rule proposal.

The original proposal drew a harsh response from the industry because they believed the proposed rules were over-reaching. FINRA’s original proposal planned to require 30 days notice for changes in a number of routine business activities, such as:
•advance notice of new products or services;
•expansion of personnel beyond certain limits;
•transactions that involved 10% or more of a firm’s ownership, assets or revenue; and
•changes in a member’s service providers.

The proposal is designed to avoid fraud by broker dealers and their affiliates. However, David Bellaire, FSI general counsel, stated “that [FINRA’s] email did not specify what will be included in the new proposal.

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