NASAA has released for internal and public comment proposed changes to Model Rules 102(e)(1)-1 and 203(a)-2 under the Uniform Securities Act of 1956 and Model Rules USA 2002 411(c)-1 and USA 2002 411(f)-(1) under the Uniform Securities Act of 2002 to clarify requirements relating to inadvertent custody of client funds. The proposal is intended to harmonize recordkeeping requirements in the rules to provisions that establish when funds and securities that are inadvertently received are deemed to be in the possession of an adviser. Comments Due: February 12, 2013. Lofchie Comment: This proposal

The Division of Trading and Markets has issued no-action relief stating that it will not recommend enforcement action under Exchange Act Rule 17a-8 ("Financial Recordkeeping and Reporting of Currency and Foreign Transactions") if a broker-dealer relies on a registered investment adviser to perform some or all of its customer identification program ("CIP") obligations. The letter extends a 2011 no-action position, which is substantially similar to previous no-action positions taken in 2004. Expiry Date: This letter extends the no-action position in the 2011 Letter for an additional 2 years from

FINRA/NASD has filed with the SEC an extension until February 15, 2013 for SEC action on a proposed rule change to restructure quotation collection and dissemination for securities currently quoted through Pink Sheets and the OTC Bulletin Board Service ("OTCBB"). In connection with the proposal, FINRA would cease operation of the OTCBB, establish a Quotation Consolidation Facility ("QRF") for non-exchange listed equities and certain other equities that do not qualify for real-time trade reporting, and require members that directly display quotations on inter-dealer systems to contemporaneously

FINRA has filed with the SEC a proposed rule change to delay the implementation date of FINRA Rule 5350 ("Stop Orders"), as approved in SR-FINRA-2012-026, until March 4, 2013. New FINRA Rule 5350, which replaces old FINRA Rule 6140(h), permits firms to offer order types that are similar to “stop orders” but have different triggers. The delay was requested to provide members additional time to finalize standard order nomenclature and order messaging standards. See: Text of Proposed Rule Change (links externally to FINRA website).

FINRA has filed with the SEC a proposed rule change to adopt the Interim Form for Funding Portals (“IFFP”). The IFFP is an online form for prospective intermediaries that intend to apply for membership with FINRA as funding portals (“prospective funding portal members”) pursuant to Title III of the JOBS Act. FINRA is inviting prospective funding portal members, on a voluntary basis, to submit information to FINRA using the IFFP until FINRA and the SEC adopt final rules with respect to registered funding portals. See: Text of Proposed Rule Change (links externally to FINRA website). See also