Biglaw, Finance, Money

Does FINRA Really Want To Make It Easier To Communicate With The Public

In FINRA Notice to Members 15-16, FINRA has solicited comments to its proposal that would make communications with the public a bit easier.

By JOSHUA HORN  
on

Ed note: This post originally appeared on Securities Compliance Sentinel:ANALYSIS OF CUTTING-EDGE SECURITIES INDUSTRY ISSUES.

In FINRA Notice to Members 15-16, FINRA has solicited comments to its proposal that would make communications with the public a bit easier. FINRA proposes to change Rule 2210 (communication with the public), 2214 (requirements for the use of investment analysis tools), and 2213 (requirements for the use of bond mutual fund volatility ratings).

All of these rule changes will make it easier for broker dealers to communicate with the public. So you may ask why would FINRA do such a thing when communications with customers are being subject to further scrutiny in both the civil and regulatory contexts.

For one, FINRA has noted that these rules need to be updated to “better align the investor protection benefits and the economic impacts.” FINRA also plans to release guidance and administrative measures in conjunction with the rule changes.

The biggest change comes in the form of the timing of when a member firm must file certain communications with FINRA. In the past, member firms would have to file certain communications at least 10 days prior to use. Under the proposed rule changes, a member firm can file certain communications with FINRA within 10 days of first use. In other words, that firm can file either 10 days before or 10 days after the first use.

What does this all mean for member firms? FINRA believes that these changes will result in a cost savings for firms in the form of filing fees, as well as an overall decrease in the scope of certain filing requirements. At the same time, these rule change may make it easier for firms to communicate information (such as educational information about mutual funds) to the public.

Overall, it appears as though the proposed rule changes could save firms money and enhance the customer experience. The comment period ends on July 2. Hopefully, you will be able to realize these contemplated benefits of these changes before the end of the year. *

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* photo from freedigtalphotos.net

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