The Financial Industry Regulatory Authority Inc. of Washington and New York issued proposals for consolidated regulations governing broker-dealer financial responsibility, supervision and books and records, as well as investor protection.
The proposals would merge rules of the former NASD of Washington and New York and the regulatory operations of the former New York Stock Exchange of New York, which merged in 2007 to form Finra.
Creating a unified Finra rulebook will be accomplished in phases with “substantial completion” over the next year, according to a statement by Finra.
The deadline for submitting comments on the proposals is June 13.
The proposal for supervision and supervisory controls “would provide firms with greater flexibility as to the manner, but not the substance, in which they can meet their … supervisory control procedures obligations,” Finra said.
Rules for books and records would be grouped along similar subject lines to give firms a better understanding of the regulatory structure, and they would be streamlined to be as clear as possible, according to Finra. Requirements that have become obsolete and duplicative would be eliminated.
The proposed financial responsibility rules, based in part on existing rules from the old NASD and NYSE, would give brokerage firms expedited reviews if they were charged with violating the rules.
Brokers also would have to provide customers with Finra’s web address and information about Finra’s BrokerCheck program at least once a year under the investor education and protection proposal.
Finra also soon will be submitting to the Securities and Exchange Commission a proposal to move NASD marketplace and procedural rules into the new Finra rulebook.
The transfer would not change the rules, but they would be renumbered and reorganized into a more user-friendly framework, Finra said.
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