Guidance

Short sales by options professionals established during the course of bona fide market making activities are exempt from the affirmative determination requirements, regardless of whether the short sales constitute a permitted offset under Regulation T.

Requirements under NASD Rule 3030 (formerly Article III, Section 43) for investment seminar activities conducted by dually registered persons that charge fees from participants.

Clarification of NASD Notice to Members 94-44 to situations in which a dually registered person maintains discretionary trading authority, determines portfolio changes, and prepares trade instructions for customer accounts and charges the accounts an asset-based fee.

Whether a proposed standby purchase agreement entered into between affiliate of a member and an issuer in connection with a public offering of the issuer's common stock could constitute an option.

Cash rebates issued to pension plan customers with respect to secondary market transactions in outstanding securities (under former Article III, Section 24, now Rule 2740 and IM-2740).

Background

FINRA has been actively monitoring financial technology-related (FinTech) developments in the securities industry. A growing number of FinTech firms have been embracing new technologies, pioneering innovative products and developing new client-oriented financial services business models. Many traditional financial service providers are also rethinking their business models, incorporating these technologies and services. As part of the FINRA360 process, FINRA determined that it needed to enhance resources dedicated to this rapidly developing area of the industry.

The FINRA qualification and registration requirements are set forth in FINRA Rules 1210 through 1240.¹ These rules, among other things: (1) require the registration of individuals as representatives or principals; (2) allow for the permissive registration of associated persons of firms; (3) establish a waiver program for individuals working for a financial services industry affiliate of a member firm; (4) require firms to designate a Principal Financial Officer and a Principal Operations Officer; and (5) set forth requirements for registered persons who are to function as princip

The Firm Summary Scorecard provides an overview of certain performance and comparison statistics from each of the active individual report cards in one specific location. The Scorecard supplies data available in the respective report cards for the current month and the preceding month.

Report Glossary

The table below provides a reference description for all of the elements found in the Firm Summary Scorecard. (See Firm Summary Scorecard for a sample segment of the report.)

General

1. Do Rules 5110, 5121 and 2310 (the “Corporate Financing Rules”) apply to Regulation A offerings?

Q: Are members that provide FINRA an electronic feed (“eFeed”) of account transaction and position data via secure file transfer protocol (SFTP) for the accounts of FINRA employees also required to send duplicate account statements to FINRA under Rule 2070(a)? NEW

The Report Center provides firms with secure access to data and reports that help firms detect potential compliance problems early. FINRA Report Center provides report cards that cover a variety of topics and rulesets.   

Reports on the Report Center do not relieve a firm from compliance obligations imposed under FINRA’s By-Laws and Rules, and will not limit or prevent FINRA from taking appropriate regulatory or disciplinary action against a firm or associated person for failure to comply with such rules.

Background

In response to the March 2017 Special Notice on Engagement issued as part of FINRA360, FINRA received a number of comments and suggestions regarding the effectiveness of communications with and education of firms, including ways in which FINRA could enhance its engagement with member firms. After careful review of the comments and suggestions received, FINRA is taking a number of actions.