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Regulation and Compliance > Federal Regulation > FINRA

FINRA OKs Changes to Communications Rules, Seeks Public Comment

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The Financial Industry Regulatory Authority’s board approved proposed changes Thursday to FINRA’s Communications With the Public Rules, as well as amendments to the Trading Activity Fee for firms with no customers that are engaged solely in proprietary trading activity for their own accounts.

The changes to FINRA’s communications rules, approved by FINRA’s Board, are the first changes FINRA has approved under its retrospective review initiative, which was launched in April 2014.

FINRA said that it plans to issue a regulatory notice in the coming months on proposed changes to its communications Rules 2210, 2213 and 2214.

The notice will request comment on eliminating certain filing requirements that present a low level of risk to investors, such as the filing requirements for generic investment company material and investment company shareholder reports. The proposals would make other changes to better align the requirements to the relative risks presented by specific types of sales material.

“The proposed changes to FINRA’s Communications With the Public Rules will help ensure that these rules are meeting their intended investor-protection objectives by reasonably efficient means,” FINRA Chairman and CEO Richard Ketchum said.

The board authorized FINRA to file with the Securities and Exchange Commission a proposed amendment to Rule 0150 (Application of Rules to Exempted Securities Except Municipal Securities) to extend the rule governing markups and markdowns to transactions in U.S. Treasury securities.

Also, the board authorized FINRA to file with the SEC a proposal to charge a $115 fee for the new Municipal Advisor Representative Examination (the Series 50 exam), which is sponsored by the Municipal Securities Rulemaking Board.

In addition to the test development fee MSRB charges, FINRA will charge an administration and delivery fee for the Series 50 exam. FINRA says that it will use the fee, in part, to cover the fees that vendors charge FINRA for delivering qualification exams through their networks of test delivery centers and for expenses related to the PROCTOR exam-taking system.

The exam is part of the MSRB’s new standards for muni advisors and will be available in 2016, the MSRB says.

FINRA also announced at the board meeting that it is proposing to tailor its Trading Activity Fee (TAF) to the business activities of proprietary trading firms with no customers.

FINRA plans to publish a regulatory notice requesting comment on proposed amendments to the TAF for firms with no customers which are engaged solely in proprietary trading for their own accounts.

The proposed amendments would exclude from the TAF those transactions executed on an exchange of which the firm is a member (including non-market-maker trades) provided the firm does not have customers and trades only for its own account. These proposed changes follow the SEC’s recent proposal to eliminate the registration exemption for proprietary trading firms that are members of exchanges but not FINRA.

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