Continuing the retrospective review of its rules, the Financial Industry Regulatory Authority requested comment Monday on its rules governing outside business activities and private securities transactions.
The review is part of the FINRA360 initiative, a comprehensive review of the self-regulator’s operations and programs.
FINRA is seeking feedback from member firms on rules governing broker-dealer employees’ business and securities activities carried out away from their firm – activities that are outside the regular course or scope of their employment with the firm.
These rules, FINRA says, “were designed to protect investors from potentially problematic or risky activities that are unknown to the firm but could be perceived by the investing public as either part of the firm’s business or having the firm’s imprimatur. In addition, the rules protect firms from reputational or litigation risks when employees engage in business and securities activities outside of the firm.”