FINRA Proposes Rule Regarding Sales or Offers of Sales of Securities to Military Members or Dependents
FINRA filed a rule proposal with the SEC to adopt FINRA Rule 2272. The new rule would govern the sale or offer of sale of securities on the premises of any military installation or to members of the U.S. Armed Forces or their dependents. According to FINRA, the adoption of Rule 2272 complies with the statutory requirements of the Military Act.
The proposed rule would require any member who engages in the sale or offer of sale of securities to any member of the U.S. Armed Forces or a dependent thereof, or on the premises of any military installation, to "clearly and conspicuously" disclose in writing to a potential investor (i) the identity of the member offering the securities; (ii) that the securities are not being offered or provided by the member on behalf of the federal government, and that the offer of such securities is not sanctioned, recommended or encouraged by the federal government; and (iii) that no person will receive any referral fee or incentive compensation in connection with a sale or offer of sale of securities unless such person is an associated person of a registered broker-dealer and is qualified pursuant to the rules of a self-regulatory organization.