Additional Guidance on FINRA’s New Suitability Rule (FINRA Regulatory Notice)

FINRA Reg. Notice 12-25

In November 2010, the SEC approved FINRA's new suitability rule, FINRA Rule 2111. FINRA then issued Regulatory Notice 11-02, which announced the SEC's approval of the new rule and discussed its requirements. FINRA also issued Regulatory Notice 11-25, which offered further guidance on the rule and announced a new implementation date of July 9, 2012.

This Notice provides significant guidance in the form of an FAQ on the new rule, and should be reviewed by all broker-dealers.

Implementation Date: July 9, 2012

Cross References: Lofchie's Guide to Broker-Dealer Regulation, Chapter 5: Customers; FINRA Rules 0160, 1250, 2010, 2020, 2090, 2111, 2210, 2214, 2330, 2360, 2370, 3270, 4512 and 5310; JOBS Act; NASD Rules 1014, 1021, 1031, 2210, 2310 and 3010; NASD NTMs 05-59, 05-50, 05-26, 05-18, 04-89, 04-30, 03-71, 03-07, 01-23, 99-45, 96-32 and 93-73; FINRA Regulatory Notices 12-03, 11-25, 11-15, 11-02, 10-51, 10-22, 10-09, 10-06, 09-73, 09-31 and 08-81; Rule 506 of Regulation D; SEA Rules 17a-3 and 17a-4.

For more information about this document and other issues relating to the FINRA suitability rule, you may contact one of the following Cadwalader attorneys: Steven D. Lofchie; Glen P. Barrentine; Nihal S. Patel.