The Financial Industry Regulatory Authority’s board sent two rulemakings to the Securities and Exchange Commission for approval — one related to firms with a significant history of misconduct and another to align with Regulation Best Interest.
The Restricted Firm Obligations Rule would require broker-dealers that are identified as restricted firms to maintain a deposit in a segregated account from which withdrawals could not be made without FINRA’s consent. The money could be used to pay arbitration awards.
FINRA is also seeking SEC approval for proposed amendments to FINRA’s Suitability and Noncash Compensation Rules to align with Reg BI.
The board approved proposed amendments to the rules governing suitability and noncash compensation to address inconsistencies with Reg BI and to mitigate potential confusion over which standards will apply with respect to recommendations to retail customers.
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