FINRA Proposal Relating to Security-Based Swaps

SEC Release No. 34-64884; SR-FINRA-2011-033

July 14, 2011

The SEC declared immediately effective a FINRA proposal to adopt new FINRA Rule 0180, regarding the application of FINRA's rules to security-based swaps. The new rule seeks to provide relief akin to what the SEC has already provided, e.g., the rule does not grant relief from certain FINRA conduct rules. In particular, the new rule does not exempt security-based swaps from (i) FINRA Rule 2010 (standards of commercial honor and principles of trade); (ii) FINRA Rule 2020 (antifraud rule); (iii) FINRA Rule 3310 (AML program); and (iv) FINRA Rule 4240 (margin for CDS). Other FINRA rules are said to apply to security-based swaps "only to the extent they would have applied as of July 15, 2011." The proposal became effective on July 8, 2011 and will be coterminous with the SEC's Title VII exemptive order.

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

Steven Lofchie; [email protected]

Jeffrey Robins; [email protected]

Cross References

FINRA Rules 0180, 2010, 2020, 3310, 4240

SEC Release No. 34-64678 (SEC release on Title VII compliance dates)

SEC Release No. 34-64795 (SEC release grant temporary exemptions under Title VII)