FINRA Invitation to Comment on Markups (with Lofchie Comment)

As part of the process of developing a new, consolidated rulebook, FINRA announced that it is requesting comment on proposed FINRA rules governing markups, markdowns, commissions and fees. FINRA initially sought comment on the proposed rules in Regulatory Notice 11-08. In response to the comments received, FINRA is proposing several changes to the proposed rules. These changes include, among other things, amendments to:

(1) retain the 5% markup policy in NASD IM-2440-1 (Mark-Up Policy);
(2) revise certain of the relevant factors used to determine the reasonableness of markups and commissions;
(3) eliminate the requirement to provide commission schedules for equity securities transactions to retail customers; and
(4) extend the proposed markup rules to transactions in certain government securities. This Notice requests comment on the revised proposal.

Click here to view the text of the proposed rules.

Comments Due: April 1, 2013.

Lofchie Comment: It is a prudent use of time for firms to consider how the markup rules may be applied to each of the markets in which they participate -- and to comment on any aspects of the proposal that may be problematic.

Click here to view FINRA Regulatory Notice 13-07 in full (links externally to FINRA website).