FINRA increased margin requirements for exchange-traded notes and options in order to address the complexity of these products, as well as confirming that exchange-traded notes and options on them are not allowed for portfolio margining.
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The FINRA Member Regulation Department will review products linked to the Chicago Board Options Exchange Volatility Index.
IOSCO issued a Consultation Report containing policy approaches to enhance protections for retail investors purchasing OTC leveraged products.
A U.S. broker-dealer agreed to pay restitution to settle FINRA charges of making unsuitable recommendations in connection with volatility-linked exchange-traded products. FINRA reminded firms of sales practice obligations for such products.
Morgan Stanley Smith Barney, LLC agreed to pay an $8 million penalty to settle SEC charges alleging that the firm, which was dually registered as an investment advisor and broker-dealer, had failed to implement written compliance policies and procedures.