Rule Change to Clarify Scope of Operations Professional Rule Requirements (Adopting Release); 76 FR 52040
August 15, 2011
The SEC granted accelerated approval to a FINRA proposal to amend the supplementary material to its recently-adopted Rule 1230, which requires registration and imposes certain other requirements on operations professionals. The rule change is intended to provide that employees of foreign broker-dealers whose activities with respect to the customers of a FINRA member are limited to the facilitation of the clearance and settlement of transactions in foreign securities are not subject to the registration requirement of Rule 1230(b)(6)(A). The exception only applies where (1) the FINRA member sending the order to the foreign BD is not a direct participant in a foreign clearing system; and (2) the foreign BD takes the customer's instruction to settle the transaction on a DVP/RVP basis trough the foreign clearing system and settles directly with the customer.
For more information about this document, you may contact one of the following Cadwalader attorneys: Steven D. Lofchie; Jeffrey L. Robins; Maurine R. Bartlett; Glen P. Barrentine.
Cross References: FINRA Rule 1230(b)(6) and Supp. Mat. 1230.06, 76 FR 36586 (Approval of Rule 1230; SEC Release No. 34-64687)