FINRA Proposal to Adopt NASD Rule 2830 as FINRA Rule 2341, with Significant Changes

SR-FINRA-2011-018

April 19, 2011

FINRA submitted to the SEC a proposal to adopt NASD Rule 2830 as FINRA Rule 2341, with significant changes. Rule 2830 generally limits the sales charges that may be paid to broker-dealers in connection with the distribution of investment company securities. Among other things, the FINRA proposal would amend the rule by (1) requiring firms to make new disclosures to investors on cash compensation arrangements; (2) amending the recordkeeping requirements relating to non-cash compensation; (3) eliminating a condition regarding discounted sales of investment company securities to dealers; and (4) codifying certain FINRA interpretive guidance regarding exchange-traded funds.

Cross References

NASD Rule 2830
FINRA Rule 2341 (proposed)