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13-32 SEC Approves Amendments to FINRA Rule 9217 to Include Additional Rule Violations Eligible for Disposition under FINRA's Minor Rule Violation Plan; Effective Date: September 26, 2013
Minor Rule Violations
Code of Procedure
Minor Rule Violation Plan
Referenced Rules & Notices
FINRA By-Laws Schedule A, Sec. 1(b)
FINRA Rules 1250, 2251, 2266, 2360, 3160, 4360, 4370, 4524, 5110, 5121, 5122, 5190, 6181, 6182, 6250, 6380B, 6623, 6624, 6760, 7230B, 7260B, 7330, 7360, 7430 and 9217
MSRB Rules G-2, G-3, G-6, G-8, G-9, G-10, G-21, G-27 and G-40
NASD Rules 1021, 1150, 1160 and 3010
SEA Rules 10b-10, 17a-3 and 17a-4
SEC Regulation NMS Rules 605 and 606
SEC Regulation SHO Rule 200(g)
The Securities and Exchange Commission (SEC) approved amendments to FINRA Rule 9217 to include additional rules for disposition pursuant to FINRA's Minor Rule Violation Plan (MRVP). The additional rules are set forth in Attachment A. The amendment became effective September 26, 2013.
The text of the amended rules is available at www.finra.org/notices/13-32.
Questions concerning this Notice should be directed to Philip Shaikun, Associate Vice President and Associate General Counsel, Office of General Counsel, at (202) 728-8451.
Background & Discussion
FINRA Rule 9216(b) provides procedures for disposition of certain rule violations designated as minor rule violations pursuant to a plan declared effective by the SEC in accordance with Section 19(d)(1) of the Exchange Act and Rule 19d-1(c)(2) thereunder. FINRA's MRVP allows FINRA to impose a fine of up to $2,500 on any firm it regulates or person associated with a FINRA-regulated firm for a minor violation of an eligible rule. On September 26, 2013, the SEC approved amendments to expand Rule 9217, which sets forth the rules eligible for MRVP disposition.
The purpose of the MRVP is to provide reasonable but meaningful sanctions for minor or technical violations of rules. The option to impose an MRVP sanction gives FINRA additional flexibility to administer its enforcement program in the most effective and efficient manner, while still fully meeting FINRA's remedial objectives in addressing violative conduct. For example, MRVP dispositions provide a useful tool for implementing the concept of progressive discipline to remediate misconduct.
The inclusion of a rule in FINRA's MRVP does not minimize the importance of compliance with the rule. FINRA will continue to examine and surveil for compliance with eligible rules in a manner consistent with its examination programs and will determine on a case-by-case basis whether disposition pursuant to the MRVP is appropriate. The inclusion of a rule in the MRVP does not require FINRA to treat any particular violation of that rule pursuant to the MRVP. FINRA therefore retains the discretion to resolve minor violations as informal matters or through an Acceptance, Waiver and Consent or filing of a complaint, depending on the facts and circumstances. FINRA does not intend to develop a formula as to when a matter must be handled pursuant to the MRVP, as opposed to other alternatives, including informal action. Similarly, a firm or associated person is not required to accept an MRV disposition and may always avail itself of the procedural rights under FINRA rules to challenge an allegation in any complaint that may be filed.
1 See Securities Exchange Act Release No. 70521 (September 26, 2013), 78 FR 60982 (October 2, 2013) (Order Approving File No. SR-FINRA-2013-033)
Additional Rules Included in FINRA's MRVP as of September 26, 2013