Summary of selected FINRA regulatory notices and disciplinary actions July‐August 2009

Abstract

Purpose

The purpose of this summary is to provide excerpts of selected Financial Industry Regulatory Authority (FINRA) regulatory notices and disciplinary actions issued in July and August 2009 and a sample of disciplinary actions during that period.

Design/methodology/approach

The paper provides excerpts from FINRA Regulatory Notice 09‐42, Variable Life Settlement Transactions; 09‐49, Conflicts of Interest; 09‐52, Trade Reporting; and 09‐53, Non‐traditional ETFs.

Findings

(09‐42) FINRA is concerned about variable life settlements because they involved materially different factors and raise materially different issues than more widely held securities such as stocks or bonds. (09‐49) Rule 2720 prohibits a member firm with a conflict of interest from participating in a public offering, unless the nature of the conflict is prominently disclosed and certain other specific requirements are met. (09‐52) Effective January 11, 2010, firms that execute OTC trades in equity securities during the hours that a FINRA trade reporting facility is closed must report the trade within 15 minutes of the opening of the facility. (09‐53) Effective December 1, 2009, FINRA is implementing increased customer margin requirements for leveraged ETFs and uncovered options overlaying leveraged ETFs.

Originality/value

These are direct excerpts designed to provide a useful digest for the reader and an indication of regulatory trends. The FINRA staff are aware of this summary but have neither reviewed, nor edited it. For further detail as well as other useful information, the reader should visit www.finra.org.

Citation

Davis, H.A. (2009), "Summary of selected FINRA regulatory notices and disciplinary actions July‐August 2009", Journal of Investment Compliance, Vol. 10 No. 4, pp. 65-83. https://doi.org/10.1108/152858109