FINRA is reissuing a set of controversial rules for advisors. The original rules were issued in 2010 and comments signaled that the requirement for 30-days’ notice from its members for changes in a number of routine business activities was too far-reaching.
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The original rules demanded that FINRA receive advance notice of new products or services, increases in personnel after a certain threshold, notification of transactions involving 10% or more of a firm’s ownership, and changes in a firm’s service providers.
The changes would then be subject to a formal approval process by FINRA in an effort to prevent fraud at broker-dealers and their affiliates.
SIFMA urged FINRA to revamp the proposal and do away with many of its requirements
. The Financial Services Institute Inc. (FSI) stated in a letter that the new rules would extend FINRA’s jurisdiction well beyond traditional limits.
The revision is said to include provisions to address regulatory issues FINRA has identified and to codify existing practices and interpretations.