SEC Approves Consolidated FINRA Rules Governing Securities Lending/Borrowing, Customer Segregation and Callable Securities: FINRA Regulatory Notice 14-05 (with Lofchie Comment)

FINRA issued a notice regarding the SEC-approved rule change to adopt additional financial and operational Rules 4314 ("Securities Loans and Borrowings"), 4330 ("Customer Protection – Permissible Use of Customers' Securities") and 4340 ("Callable Securities") for the consolidated FINRA Rulebook. The new consolidated rules govern (i) securities loans and borrowings, (ii) permissible use of customers' securities and (iii) callable securities.

The rules are in part based on, and replace, provisions of the NYSE and NASD rules.

Effective Date: May 1, 2014.

Lofchie Comment: While these requirements are based on the current rules, they are not identical to those rules. Further, the new rules incorporate a number of NYSE requirements – in particular, NYSE Rule 296, which had provisions governing securities borrowing and lending transactions – that may be new to FINRA-only firms.

See: FINRA Regulatory Notice 14-05. See also:Text of the Rule Change. See generally: FINRA Rule Calendar (accessible to Cabinet subscribers only).Related news: SEC Approves FINRA Rule Proposals Regarding Securities Loans and Allocations of Securities Calls (with Lofchie Comment) (November 27, 2013).