Summary of selected FINRA Regulatory Notices October-December 2010

摘要

Purpose – The purpose of this summary is to provide excerpts of selected Financial Industry Regulatory Authority (FINRA) Regulatory Notices and Disciplinary Actions issued in October, November, and December 2010. Design/methodology/approach – The paper provides excerpts from FINRA Regulatory Notice 10-45, Margin and Extension of Time Requests; 10-51, Commodity Futures-Linked Securities; 10-57, Funding and Liquidity Risk Management Practices; and 10-61, Independent Verification of Assets. Findings – Regulatory Notice 10-45: FINRA Rule 4210 rule promulgates the margin requirements that determine the amount of collateral customers are expected to maintain in their margin accounts, including strategy-based margin accounts and portfolio margin accounts; FINRA Rule 4220 sets forth the requirements for daily recordkeeping of initial and maintenance margin calls that are issued pursuant to Regulation T and the margin rules. Notice10-51: Firms that offer commodity futures-linked securities are reminded that they must ensure that communications with the public about these securities are fair and balanced, that recommendations to customers are suitable, and that their registered representatives adequately understand and are able to inform their customers about these securities before they recommend them. Notice 10-57: FINRA expects broker-dealers to develop and maintain robust funding and liquidity risk management practices to prepare for adverse circumstances. Notice 61: The SEC has approved and FINRA has adopted new FINRA Rule 4160 to strengthen its ability to independently verify assets maintained by a member at a non-member financial institution. Originality/value – These are direct excerpts designed to provide a useful digest for the reader and an indication of regulatory trends. The FINRA staff is aware of this summary but has neither reviewed nor edited it. For further detail as well as other useful information, the reader should visit www.finra.org