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  • 14-12 FINRA Announces Updates of the Interpretations of Financial and Operational Rules

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    SEC Financial Responsibility Rules

    Regulatory Notice
    Notice Type

    Guidance
    Suggested Routing

    Compliance
    Finance
    Legal
    Operations
    Regulatory Reporting
    Senior Management
    Key Topics

    Books and Records
    Customer Protection
    Net Capital
    Referenced Rules & Notices

    Regulatory Notice 08-56
    Regulatory Notice 13-44
    Regulatory Notice 14-06
    SEA Rule 15c3-1
    SEA Rule 15c3-3
    SEA Rule 15c3-3a
    SEA Rule 17a-3
    SEA Rule 17a-4

    Executive Summary

    FINRA is updating the imbedded text of Securities Exchange Act (SEA) financial responsibility rules in the Interpretations of Financial and Operational Rules to reflect the effectiveness of amendments the SEC adopted.1 The updated imbedded text relates to SEA Rules 15c3-1, 15c3-3, 15c3-3a, 17a-3 and 17a-4.

    Questions concerning this Notice should be directed to:

    •   Yui Chan, Managing Director, Risk Oversight and Operational Regulation (ROOR), at (646) 315-8426; or
    •   Susan DeMando Scott, Associate Vice President, ROOR, at (240) 386-4620.

    Background & Discussion

    In July 2013, the SEC adopted amendments to the financial responsibility rules for broker-dealers. FINRA is updating the imbedded SEC rule text in the Interpretations of Financial and Operational Rules to reflect the amendments that became effective on March 3, 2014, pursuant to a temporary exemption granted by the SEC.2 The updated imbedded text relates to SEA Rules 15c3-1, 15c3-3, 15c3-3a, 17a-3 and 17a-4. These rule text updates are available in portable digital format (pdf) on FINRA's Interpretations of Financial and Operational Rules page.

    Further, SEC staff continues to communicate and issue written and oral interpretations of the financial responsibility and reporting rules including the newly amended sections of such rules. FINRA has previously updated the Interpretations of Financial and Operational Rules on its website in Regulatory Notices 08-56, 13-44 and 14-06. FINRA will publish in a separate Regulatory Notice at a later date interpretation updates in connection with the amendments to the rules that became effective on March 3, 2014.

    FINRA member firms and others that maintain the hardcopy version of the Interpretations of Financial and Operational Rules may refer to the accompanying updated pages, containing the aforementioned rule text updates, which are being made available to enable the replacement of existing pages in the hardcopy version of the Interpretations of Financial and Operational Rules. The filing instructions for the new pages are as follows:

    SEA Rule Remove Old Pages Add New Pages
    15c3-1 319 319
    15c3-3 2001 2001
    15c3-3 2021–2022 2021–2022
    15c3-3 2041–2042 2041–2042
    15c3-3 2102 2102
    15c3-3 2124 2124
    15c3-3 2141-2144 2141-2144
    15c3-3 2201 2201
    15c3-3 2221–2224 2221–2224
    15c3-3 2241 2241
    15c3-3 2301 2301
    15c3-3 2331 2331
    15c3-3 2341 2341
    15c3-3 2401–2408 2401–2408
    15c3-3 2421–2422 2421–2422
    15c3-3 2431–2434 2431–2434
    15c3-3 2451–2452 2451–2452
    15c3-3 2461–2466 2461–2467
    15c3-3 2501–2502 2501
    15c3-3 2511 2511
    15c3-3 2521 2521
    15c3-3 2524 2524
    15c3-3 2531–2532 2531
    15c3-3 2551–2552 2551–2553
    15c3-3 2561 2561
    15c3-3 2581–2582 2581–2582
    15c3-3a 2601–2610 2601–2610
    15c3-3a NA 2615–2616
    17a-3 3042 3042
    17a-4 3102 3102
    17a-4 3106 3106
    17a-4 3112 3112


    1 See Securities Exchange Act Release No. 70072 (July 30, 2013), 78 FR 51824 (August 21, 2013) (Financial Responsibility Rules for Broker-Dealers) (amending SEA Rules 15c3-1, 15c3-1a, 15c3-2, 15c3-3, 15c3-3a, 17a-3, 17a-4 and 17a-11). The SEC subsequently modified the effective date of specified amendments to the rules pursuant to an Exemptive Order. See Securities Exchange Act Release No. 70701 (October 17, 2013), 78 FR 62930 (October 22, 2013) (Order Providing Broker-Dealers a Temporary Exemption from the Requirements of Certain New Amendments to the Financial Responsibility Rules for Broker-Dealers under the Securities Exchange Act of 1934) (granting temporary exemption, until March 3, 2014, from the amendments to: SEA Rule 15c3-3, except paragraph (j)(1); SEA Rule 15c3-3a}; SEA Rule 17a-3; SEA Rule 17a-4; and paragraph (c)(2)(iv)(E)(2) of SEA Rule 15c3-1).

    2 See note 1.