SEC Approves Consolidated FINRA Rules Governing Books and Records

FINRA RN 11-19

April 27, 2011

FINRA announced that the effective date for its recently approved rulemaking to adopt new books and records rules in the consolidated FINRA rulebook will be December 5, 2011. The new rules are substantially derived from NASD Rule 3110 and NYSE Rule 410 (and the interpretations thereto). Among other things, the rule change adopts (1) NASD 3110(a) as FINRA Rule 4511; (2) NASD Rule 3110(d-e) as FINRA Rule 4512; (3) NASD Rule 3110(f) as FINRA Rule 2268; (4) NASD Rule 3110(g) as FINRA Rule 4514; (5) NASD Rule 3110(h) as FINRA Rule 7440(a)(4); and (6) NASD Rule 3110(j) as FINRA Rule 4515. In addition, the rule change adopts NYSE Rule Interpretation 410/01 as FINRA Rule 5340 and NYSE Rule Interpretation 410/02 as FINRA Rule 4515.01.

NASD Rule 3110 (and the new FINRA rules it becomes) generally requires firms to preserve books and records in a format as required by FINRA rules and Exchange Act Rules 17a-3 and 17a-4. NYSE Rule 410 (and the new FINRA rules it becomes) generally requires firms to preserve records as to orders entered into the NYSE Off-Hours Trading Facility. The rule changes generally adopt the prior NASD and NYSE rules, with a number of changes, including a four-year retention period for customer complaints (rather than three years) and a requirement that firms maintain information establishing that a customer is of legal age to engage in transactions. The rule changes apply only to records generated after the effective date of the rules.

Please contact any of the following Cadwalader attorneys if you have any questions about this item:

Steven Lofchie; [email protected]

Jeffrey Robins; [email protected]

Maurine Bartlett; [email protected]

Glen Barrentine; [email protected]

Cross References

SEC Release No. 34-63784 (SEC approval of rule change)

FINRA Rules 2268, 4511, 4512, 4513, 4514, 4515, 5340, 7440(a)(4)

NASD Rule 3110

NYSE Rule 440, NYSE Interps. 410/01 and 410/02

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