On the heels of a wave of newly-launched regulatory Rules involving Supervision and other areas, the Financial Industry Regulatory Authority (“FINRA”) is taking a step back to reassess its process of reviewing past rules in a process called “retrospective rule reviews.” In an April 8, 2014 press release, the FINRA announced Regulatory Notices 14-14 and 14-15, which aim to reopen two past sets of passed Rules for public comment: (1) a set of Rules on Communications with the Public, including Rules 2210, 2212, 2213, 2214, 2215 and 2216, and (2) a set of Rules on Gifts and Gratuities and Non-Compensation, including Rules 3220, 2310(c), 2320(g)(4), 5110(h), and 2830(l)(5).
The general purpose of these retrospective rule reviews, according to FINRA, is to ensure that the Authority’s Rules “remain relevant and appropriately designed to achieve their objectives.” The choice of these specific sets of Rules at this time, however, is dependent on a variety of factors, including which Rules raise the most questions or concerns by firms (determined by feedback from FINRA’s Member Services and Education departments; how recently the Rules were amended or up for review, and the possible length of the review process in terms of Ruleset complexity.
The Rules identified in these Rule sets for retrospective reviews include:
- FINRA Rule 2210 – Communications with the Public
- FINRA Rule 2212 – Use of Investment Company Rankings in Retail Communications
- FINRA Rule 2213 – Requirements for the Use of Bond Mutual Fund Volatility Ratings
- FINRA Rule 2214 – Requirements for the Use of Investment Analysis Tools
- FINRA Rule 2215 – Communications with the Public Regarding Securities Futures
- FINRA Rule 2216 – Communications with the Public Regarding Collateralized Mortgage Obligations
- FINRA Rule 3220 – Influencing or Rewarding Employees of Others
- FINRA Rule 2310(c) – Direct Participation Programs
- FINRA Rule 2320(g)(4) – Variable Contracts of an Insurance Company
- FINRA Rule 5110(h) – Corporate Financing Rule – Underwriting Terms and Agreements
- FINRA Rule 2830(l)(5) – Investment Company Securities
For further information on this and other related subjects, please contact us at (619) 278-0020 to schedule a consultation.
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