Guidance

Technology has long played a central role in financial services innovation. It continues to do so today as many firms in the securities industry introduce new digital investment advice tools to assist in developing and managing investment portfolios. FINRA undertook a review of selected digital investment advice tools to assess these developments.

FINRA is conducting a retrospective review of the NASD Rule 1010 Series (Membership Proceedings) (collectively, MAP rules), which govern FINRA’s Membership Application Program (MAP).1 The purpose of the review is to assess whether the rules are meeting their intended investor protection objectives by reasonably efficient means and to take steps to maintain or improve the effectiveness of the rules while minimizing negative economic impacts.

On April 20, 2015, FINRA launched a significant new initiative—the FINRA Securities Helpline for Seniors (HELPS^TM)—to broaden its investor protection efforts. As part of FINRA’s commitment to the protection of senior investors, the Helpline is intended to be the “go-to” resource for senior investors with securities-related questions and concerns.

FINRA Rule 2210(d)(8) (Communications with the Public) requires a firm to include a readily apparent reference and hyperlink to BrokerCheck on the initial Web page that the firm intends to be viewed by retail investors, and any other webpage that includes a professional profile of one or more registered persons, who conduct business with retail investors.

FINRA is committed to ensuring that all respondents are treated fairly in the disciplinary process. Below, you will find brief answers to a number of questions frequently asked by respondents. We hope these answers will be helpful in orienting you to the disciplinary process.

One of the primary missions of the Securities and Exchange Commission (“SEC”) and the Financial Industry Regulatory Authority (“FINRA”) is the protection of investors, of which senior investors are an important and growing subset. As part of a collaborative effort, staff of the SEC’s Office of Compliance Inspections and Examinations (“OCIE”)1  and FINRA (collectively, the “staff”) conducted 44 examinations of broker-dealers in 2013 that focused on how firms conduct business with senior investors as they prepare for and enter into retirement.

February 20, 2015

Mr. Gregory J. Nowak
Pepper Hamilton LLP
3000 Two Logan Square
Eighteenth and Arch Streets
Philadelphia, PA 19103-2799

Re: FINRA Rule 5130 - Restrictions on the Purchase and Sale of Initial Equity Public Offerings

Dear Mr. Nowak:

This is in response to your letter dated December 3, 2014, in which you request interpretive guidance on behalf of PCV Lux, SCA ("PCV") regarding the definition of "portfolio manager" under FINRA Rule 5130(i)(10)(D) (Portfolio Managers).

1. Q: If I am an existing subscriber or vendor of the SPDS (Structured Products Dissemination Service) will I automatically receive the new ABS data set on June 1, 2015?
   A: Existing subscribers or vendors of SPDS will automatically receive disseminated transactions in publicly traded ABS. No changes to the vendor agreement are required. Please note: Rule 144A ABS transactions will be disseminated over the SPDS144A feed, which requires a subscription to the 144A data set.
   

Many firms will from time to time seek to expand their business by, for example, adding a new line of business or substantially increasing the scope and size of their existing business that may or may not require a Continuing Membership Application (CMA) for FINRA's approval.

FINRA is conducting a retrospective review of its communications rules, and is publishing this report on the assessment phase of the review. The purpose of the review is to assess whether the communications rules are meeting their intended investor protection objectives by reasonably efficient means and to take steps to maintain or improve the effectiveness of the rules while minimizing negative economic impacts.