Proposed Rule Change to Adopt the Consolidated FINRA Supervision Rules

FINRA filed with the SEC a proposed rule change to adopt the consolidated FINRA supervision rules. Specifically, the proposed rule change would:

(1) adopt FINRA Rules 3110 (Supervision) and 3120 (Supervisory Control System) to largely replace NASD Rules 3010 (Supervision) and 3012 (Supervisory Control System), respectively;

(2) incorporate into FINRA Rule 3110 and its supplementary material the requirements of NASD IM-1000-4 (Branch Offices and Offices of Supervisory Jurisdiction), NASD IM-3010-1 (Standards for Reasonable Review), Incorporated NYSE Rule 401A (Customer Complaints), and Incorporated NYSE Rule 342.21 (Trade Review and Investigation);

(3) replace NASD Rule 3010(b)(2) (often referred to as the "Taping Rule") with new FINRA Rule 3170 (Tape Recording of Registered Persons by Certain Firms);

(4) replace NASD Rule 3110(i) (Holding of Customer Mail) with new FINRA Rule 3150 (Holding of Customer Mail); and

(5) delete the following Incorporated NYSE Rules and NYSE Rule Interpretations:

(i) NYSE Rule 342 (Offices - Approval, Supervision and Control) and related NYSE Rule Interpretations;(ii) NYSE Rule 343 (Offices - Sole Tenancy, Hours, Display of Membership) and related NYSE Rule Interpretations; (iii) NYSE Rule 351(e) (Reporting Requirements) and NYSE Rule Interpretation 351(e)/01 (Reports of Investigation); (iv) NYSE Rule 354 (Reports to Control Persons); and (v) NYSE Rule 401 (Business Conduct).

See: Text of Proposed Rule Change.