Proposed Rule Change to Adopt the Consolidated FINRA Supervision Rules

FINRA Securities Fraud and Mismanagement Lawyer, Russell L. Forkey, Esq.

Date of Post June, 2011:

The purpose of this post is to provide the reader with information relative to recently proposed or adopted rules changes issued by the Financial Industry Regulatory Authority (FINRA). This information is being provided for informational purposes only. Thus, it should not be relied upon as legal advice, Also, the information provided below is subject to withdrawal, revocation and modification by FINRA, which may or may not be reflected on this site. Consequently, the reader should contact a qualified professional concerning the current status of any of the information referenced below.

Proposed Rule Change to Adopt the Consolidated FINRA Supervision Rules

Financial Industry Regulatory Authority, Inc. ("FINRA") (f/k/a National Association of Securities Dealers, Inc. ("NASD")) filed with the Securities and Exchange Commission ("SEC" or "Commission") a proposed rule change to adopt the consolidated FINRA supervision rules.  Specifically, the proposed rule change would: (1) adopt FINRA Rules 3110 (Supervision) and 3120 (Supervisory Control System) to replace NASD Rules 3010 (Supervision) and 3012 (Supervisory Control System), respectively; (2) incorporate into FINRA Rule 3110 and its supplementary material the requirements of NASD IM-1000-4 (Branch Offices and Offices of Supervisory Jurisdiction), NASD IM-3010-1 (Standards for Reasonable Review), Incorporated NYSE Rule 401A (Customer Complaints), and Incorporated NYSE Rule 342.21 (Trade Review and Investigation); (3) replace NASD Rule 3010(b)(2) (often referred to as the "Taping Rule") with new FINRA Rule 3170 (Tape Recording of Registered Persons by Certain Firms); (4) replace NASD Rule 3010(e) (Qualifications Investigated) with new FINRA Rule 1260 (Responsibility of Member to Investigate Applicants for Registration); (5) replace NASD Rule 3110(i) (Holding of Customer Mail) with new FINRA Rule 3150 (Holding of Customer Mail); and (6) delete the following NASD and Incorporated NYSE Rules and NYSE Rule Interpretations:  (i) NASD Rule 3010(f) (Applicant's Responsibility); (ii) NYSE Rule 342 (Offices-Approval, Supervision and Control) and related NYSE Rule Interpretations; (iii) NYSE Rule 343 (Offices-Sole Tenancy, and Hours) and related NYSE Rule Interpretations; (iv) NYSE Rule 351(e) (Reporting Requirements) and NYSE Rule Interpretation 351(e)/01 (Reports of Investigation); (v) NYSE Rule 354 (Reports to Control Persons); and (vi) NYSE Rule 401 (Business Conduct).

If the reader would like to review the entire filing made by FINRA relative to this proposed rule, please follow the highlighted link.