Podcast Center
Video Center
Webcasts
Resource Center
Events
November 17, 2014 at 07:50 AM
The Financial Industry Regulatory Authority is requesting public comment on its proposal to establish pay-to-play type rules for broker-dealers that closely mirror those the Securities and Exchange Commission has set forth for advisors.
In its Regulatory Notice 14-50, FINRA says that it is seeking comments by Dec. 15 on three proposed new rules.
FINRA’s proposed pay-to-play rules would restrict member firms (BDs) from engaging in solicitation activities on behalf of investment advisors if covered employees made a disqualifying political contribution.
Cipperman Compliance Services notes that most of the restrictions and definitions in FINRA’s proposal are similar to the SEC rule “except that violations of the rules would require full disgorgement of fees received.” Also, FINRA’s proposed rules would require “soliciting firms to provide extensive disclosure to the relevant government entity.”
The FINRA rules also require “a two-year time-out from political contributions to officials with the power to effect a mandate, broadly define a contribution as ‘anything of value,’ and includes private funds,” Cipperman explains.
