HelpFINRA Manual: Contents
FINRA Manual
Corporate Organization Notices
2007
07-65 FINRA Amends NYSE Rule 409(f) (Statements of Accounts to Customers) to Eliminate the Requirement to Include the Name of the Securities Market on which a Transaction is Effected; Effective Date: January 1, 2008
07-64 SEC approves amendments to NASD Rule 3010(g)(1) to Exempt Locations that Solely Conduct Final Approval of Research Reports; Effective Date: December 19, 2007
07-63 FINRA Adopts Rule Amendments Relating to Reporting of Odd-Lot Transactions; Effective Date: March 3, 2008
07-62 Revisions to the Series 23, 24, 42, 55, 62, 72 and 82 Examination Programs; Implementation Date: February 12, 2008
07-61 SEC Approves Exemption from TRACE Reporting Requirements for Certain "Derivative-Related Transactions"; Effective Date: December 13, 2007
07-60 FINRA Announces Relief Relating to Customer and PAIB Reserve Formula Computations and Required Deposits around the December 2007 Month-End Holidays
07-58 FINRA Solicits Comments on Proposed Guidance Regarding International Prime Brokerage Practices; Comment Period Expired: January 10, 2008
07-57 SEC Approves a Proposed Rule Change Relating to Representation of Parties in Arbitration and Mediation; Effective Date: December 24, 2007
07-56 Securities Industry/Regulatory Council on Continuing Education Issues Firm Element Advisory Update
07-55 FINRA Reminds Member Firms of Their Obligations Regarding Background Investigations of Prospective Personnel
07-53 SEC Approves New NASD Rule 2821 Governing Deferred Variable Annuity Transactions; Effective Date: May 5, 2008
07-52 Approves FINRA Membership Waive-In Process for Certain NYSE Member Organizations; Effective Date: October 12, 2007
07-51 Amendments to NASD IM-9216 to include certain NYSE Rules under the Minor Rule Violation Plan Effective Date: September 24, 2007
07-50 SEC Approves Amendments to NASD Rule 11870 and NYSE Rule 412 to Conform with NSCC's ACATS Transfer Cycle Time Frames; Effective Date: October 22, 2007
07-48 Broker-Dealer, Investment Adviser Firm, Agent and Investment Adviser Representative, and Branch Renewals for 2008; Payment Deadline: December 10, 2007
07-47 Amendments to NASD IM-2210-4: Web Site References to FINRA Membership and Limitations on the Use of FINRA's Name and Other Corporate Names Owned by FINRA; Effective Date: November 17, 2007
07-46 FINRA Requests Comment on Proposed Amendments to OTC Trade Reporting Requirements for Equity Securities; Comment Period Expires November 12, 2007
07-45 Amendments to NASD Rule 3210 to Conform with Amendments to the SEC's Regulation SHO Delivery Requirements; Effective Date: October 15, 2007
07-44 SEC Approves New Interpretive Material That Authorizes FINRA to Establish a Temporary Program to Allow Firms to Voluntarily Remit Accumulated Funds; Reminder Concerning Proper Disclosure of the Section 3 Fee; Effective Date: December 11, 2007 Sunset Date: June 11, 2008
07-43 FINRA Reminds Firms of Their Obligations Relating to Senior Investors and Highlights Industry Practices to Serve these Customers
07-42 SEC Approves NASD Rule 1160 Regarding Firm Contact Information; Effective Date: December 31, 2007
07-41 Member Firms are Reminded to Register with FINRA Associated Persons Who Also are Registered with Another SRO in a FINRA-Recognized Registration Category
07-40 SEC Approves Exception to Three Quote Rule and Related Recordkeeping Requirements for Certain Foreign Securities; Effective Date: September 28, 2007
07-39 SEC Approves Amendments Regarding OATS Routing Method Code for Intermarket Sweep Orders Effective Date: February 4, 2008
07-38 FINRA Extends Implementation of Rule Amendments Relating to Non-Tape (Or Clearing-Only) Reports for Previously Executed Trades Revised Effective Date: November 5, 2007
07-36 FINRA Clarifies Guidance Relating to SEC Regulation S-P under Notice to Members 07-06 (Special Considerations When Supervising Recommendations of Newly Associated Registered Representatives to Replace Mutual Funds and Variable Products)
07-35 Extension of Temporary Relief from NYSE Rule 409(f) (Statements of Accounts to Customers) to January 1, 2008
07-34 SEC Approves Amendments Relating to the Issuer-Directed Provisions of Rule 2790; Effective Date: September 5, 2007
07-33 FINRA Adopts Rule Amendments Relating to Non-Tape (or Clearing-Only) Reports for Previously Executed Trades; (Including Step-outs, Reversals and Riskless Principal Transactions) Effective Date: September 4, 2007
07-32 NASD Amends Rule 3013 and Interpretive Material 3013 to Permit Members to Designate Co-Chief Executive Officers and Multiple Chief Compliance Officers; Compliance Date: July 16, 2007
07-31 NASD Rule Changes to Conform with Amendments to SEC Rule 10a-1 and Regulation SHO; Compliance Date: July 6, 2007
07-30 NASD and NYSE Request Comment on Proposed Joint Guidance Regarding the Review and Supervision of Electronic Communications; Comment Period Expires July 13, 2007
07-29 SEC Approves Rule 2342 Setting Forth Requirements for Providing SIPC Information to Customers; Effective Date: November 6, 2007
07-28 SEC Approves Additional Mark-Up Policy for Transactions in Debt Securities, Except Municipal Securities; Effective Date: July 5, 2007
07-27 NASD Requests Comment on Proposed Rule 2721 to Regulate Member Private Securities Offerings; Comment Period Expires July 20, 2007
07-26 Securities Industry/Regulatory Council on Continuing Education Issues Firm Element Advisory Update
07-25 NASD Provides Guidance Concerning Trade Reporting Obligations for Transactions in Foreign Securities and American Depositary Receipts
07-24 New Requirement for the Reporting of Consolidated Short Interest Positions to the Intermarket Surveillance Group (ISG); Effective September 2007
07-21 Reporting of Transactions in TRACE-Eligible Securities With Execution Dates More Than T+365 Days Before Date of Report; TRACE System Enhancement Effective on June 4, 2007
07-20 NASD Amends Rules 1012 and 1013 to Require Applicants for Membership to Submit Applications Using Online Form NMA; Implementation Date: May 7, 2007; Compliance Date: May 31, 2007
07-19 SEC Approves Amendments to Expand IM-2110-2 to Include OTC Equity Securities; Effective Date: July 26, 2007
07-18 SEC Approves Amendments to TRACE Reporting Exempting Trades in TRACE-Eligible Securities Conducted on a Facility of, and Reported to, the New York Stock Exchange; Effective Date: January 9, 2007
07-17 NASD and NYSE Joint Release Regarding Special Measures against Specified Banks Pursuant to Section 311 of the USA PATRIOT Act
07-15 SEC Approves Amendments to TRACE Rules to Reflect the Availability of TRACE "Snapshot" Data for a Reduced Monthly Fee; Effective Date: May 1, 2007
07-14 Portfolio Margin Risk Disclosure Statement and Written Acknowledgement to be Furnished to Customers Using a Portfolio Margin Account
07-13 SEC Approves Amendments to NASD Code of Arbitration Procedure Concerning Subpoenas and Payment of Arbitrators; Effective Date: April 2, 2007
07-12 NASD Requests Comment on Proposed Amendments to Rules 3010(g) and 2711 in Connection with the Rule Harmonization Project with the NYSE; Comment Period Expires April 9, 2007
07-11 Amendment to Margin Rules to Establish a Portfolio Margin Pilot Program; Effective Date: April 2, 2007
07-10 SEC Approves Changes to NASD Interpretive Material 8310-2 Regarding the Release of Information through NASD BrokerCheck; Effective Date: March 19, 2007
07-09 SEC Approves Amendments to NASD Rules to Modify and Expand NASD's Authority to Initiate Trading and Quotation Halts in Over-the-Counter (OTC) Equity Securities; Effective Date: March 16, 2007
07-07 SEC Approves Revision of Customer and Industry Portions of NASD Code of Arbitration Procedure; Effective Date: April 16, 2007
07-06 Special Considerations When Supervising Recommendations of Newly Associated Registered Representatives to Replace Mutual Funds and Variable Products
07-05 Amendments to the Fees for Filing Offering Documents by Well-Known Seasoned Issuers Pursuant to the Corporate Financing Rule; Effective Date: February 26, 2007
07-03 NASD Announces SEC Approval of Amendments to Rule 2860 and Issues Guidance Concerning Large Options Position Reports and Aggregation of Certain Positions; Effective Date of Amendments February 12, 2007
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07-42 SEC Approves NASD Rule 1160 Regarding Firm Contact Information; Effective Date: December 31, 2007
| Regulatory Notice | |
Notice Type |
Referenced Rules & Notices NASD Rule 1120 NASD Rule 1150 NASD Rule 1160 NASD IM-3011-2 NASD Rule 3520 |
| Suggested Routing Compliance Executive Representatives Legal Operations Senior Management |
Key Topic(s) AML Compliance Officer Contact Information Emergency Contact Information Executive Representative FINRA Contact System Regulatory Element Contact Person |
Contact Information
Executive Summary
Effective December 31, 2007, new NASD Rule 1160 (Contact Information Requirements) streamlines the review and verification of contact information and eliminates the requirement that member firms review and update certain designated contact information on a quarterly basis. The new rule requires firms to update designated contact information promptly upon any material change, verify such information annually and comply promptly with any request for such information.1
NASD Rule 1160, approved by the SEC on August 1, 2007, and the related rule amendments are set forth in Attachment A of this Notice.
Questions concerning this Notice should be directed to Patricia Albrecht, Assistant General Counsel, Office of General Counsel, at (202) 728-8026. Questions concerning the FINRA Contact System should be directed to Susanne Henke, Office of Member Relations, at (240) 386-6231.
Background and Discussion
Currently, there are several rules that require firms to identify and report to FINRA certain designated contact persons:
These rules also require firms to review the contact information at the end of each calendar quarter, and if necessary, update such information within 17 business days after the end of each quarter.2 Member firms review this information and provide any updates online via the FINRA Contact System (FCS).
Based on recommendations made by its Small Firm Rules Impact Task Force,3 FINRA has decided to eliminate these quarterly review requirements and replace them with NASD Rule 1160, which provides for a more comprehensive approach for verifying and updating all contact information required to be reported. Specifically, NASD Rule 1160 requires firms to provide the required contact information via FCS or such other means as FINRA may specify.4
NASD Rule 1160 also requires firms to update the contact information promptly, but in any event not later than 30 days following any change in such information, as well as to review and, if necessary, update the information within 17 business days after the end of each calendar year.5 In addition, the rule requires firms to comply with any FINRA request for such information promptly, but in any event not later than 15 days following the request, or such longer period that may be agreed to by FINRA staff.6 NASD Rule 1160, however, does not relieve firms from any separate requirements to update such information.7
NASD Rule 1160 has several advantages over current FINRA requirements applicable to firm contact information. Since the persons who occupy the designated positions at some firms seldom change, NASD Rule 1160 eliminates any unnecessary burden that firms may incur in conducting quarterly reviews of the contact information. At the same time, NASD Rule 1160 helps to ensure that the contact information required by FINRA is kept current and provided to FINRA promptly upon request. This will assure FINRA's ability to contact its member firms in the event of an emergency, as well as support firms' compliance with certain FINRA rules.
To assist firms in complying with NASD Rule 1160, FINRA intends to continue the practice by reminding firms at the time they file their fourth quarter FOCUS report of the need to verify annually the required contact information on FCS.
Finally, the approved rule change also amends NASD Rule 3520 to eliminate the requirement that only a firm's Executive Representative, or his or her written designee, be permitted to review and update the firm's emergency contact information.8 FINRA believes that eliminating this restriction will assist firms in complying with their obligation to keep current their emergency contact information by giving firms the flexibility to have others perform this duty as necessary or appropriate.
NASD Rule 1160 and the related rule amendments become effective on December 31, 2007. In this regard, firms are reminded that, for the third quarter of 2007, the quarterly verification requirements set forth in NASD Rule 1120 (Continuing Education Requirements), NASD Rule 1150 (Executive Representative). NASD IM-3011-2 (Review of Anti-Money Laundering Compliance Person Information), and NASD Rule 3520 (Emergency Contact Information) remain in effect.
1 See Securities Exchange Act Release No. 56179 (August 1, 2007), 72 FR 44203 (August 7, 2007) (Order Approving Proposed Rule Change Creating Rule 1160 Regarding the Reporting and Annual Review of Designated Contact Information; File No. SR-NASD-2007-034).
2 Firms currently are required to promptly update such information in the event of a change, in addition to being required to review, and if necessary, update the designated contact information on a quarterly basis. See Rule 1120(a)(7) (Regulatory Element Contact Person); Rule 3011(d) (Anti-Money Laundering Compliance Program), and Rule 3520(b) (Emergency Contact Information). See also Article IV, Section 3 of the FINRA By-Laws, addressing procedures for members to change their Executive Representatives.
3 In September 2006, FINRA (then NASD) established the Small Firm Rules Impact Task Force to examine how existing NASD rules impact smaller firms. In particular, the Task Force focuses on possible opportunities to amend or modernize certain conduct rules that may be particularly burdensome for small firms, where such changes are consistent with investor protection and market integrity.
4 See NASD Rule 1160(a).
5 See NASD Rule 1160(b).
6 See NASD Rule 1160(c).
7 For example, a firm must identify, among others, its Chief Executive Officer and Chief Compliance Officer on Form BD, and promptly update such information by submitting an amendment whenever the information becomes inaccurate or incomplete for any reason. See also Article IV, Section 1(c) of the FINRA By-Laws, requiring each member to ensure that its membership application is kept current at all times by supplementary amendments, and to file any such amendment no later than 30 days after learning of the facts or circumstances giving rise to the amendment.
8 See Rule 3520(b).
Attachment A
Below is the text of the approved rule change. New language is underlined; deletions are in brackets.
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1120. Continuing Education Requirements
This Rule prescribes requirements regarding the continuing education of certain registered persons subsequent to their initial qualification and registration with NASD. The requirements shall consist of a Regulatory Element and a Firm Element as set forth below.
Each member shall designate and identify to NASD (by name and e-mail address) an individual or individuals responsible for receiving e-mail notifications provided via the Central Registration Depository regarding when a registered person is approaching the end of his or her Regulatory Element time frame and when a registered person is deemed inactive due to failure to complete the requirements of the Regulatory Element program[, and provide prompt notification to NASD regarding any change in such designation(s). Each member must review and, if necessary, update the information regarding its Regulatory Element contact person(s) within 17 business days after the end of each calendar quarter to ensure the information's accuracy]. Each member shall identify, review, and, if necessary, update the information regarding its Regulatory Element contact person(s) in the manner prescribed by Rule 1160.
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1150. Executive Representative
Each member must identify, review, and, if necessary, update its executive representative designation and contact information as required by Article IV, Section 3 of the NASD By-Laws in the manner prescribed by Rule 1160 [within 17 business days after the end of each calendar quarter].
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1160. Contact Information Requirements
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IM-3011-2. Review of Anti-Money Laundering Compliance Person Information
Each member must identify, review, and, if necessary, update the information regarding its anti-money laundering compliance person designated pursuant to Rule 3011(d) in the manner prescribed by Rule 1160 [within 17 business days after the end of each calendar quarter to ensure the information's accuracy].
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3520. Emergency Contact Information
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