FINRA Proposal to Establish New Registration Requirements for Operations Personnel

SR-FINRA-2011-13

March 4, 2011

FINRA submitted to the SEC a proposal to establish a new registration category and qualification requirements for certain operations personnel. The proposal would create a new registration category of "Operations Professional," and would make persons covered by the rule subject to a qualification examination and status as an "associated person" under the FINRA rules. The rule would cover (1) senior management with certain operations functions; (2) supervisors and other persons responsible for authorizing certain operations functions; and (3) persons with the authority or discretion to materially commit a firm's capital in furtherance of certain operations functions. Covered operations functions under the proposal would include (i) client onboarding; (ii) collection, maintenance, re-investment, and disbursement of funds; (iii) bank, custody, depositary, and firm account management and reconciliation; (iv) margin; (v) securities lending; (vi) prime brokerage; (vii) approval of pricing models for valuations; (viii) financial control - including general ledger and treasury; and (ix) approving business requirements for sales, trading, and IT systems. In addition, the proposal would adopt NASD Rule 1120, on continuing education requirements, as new FINRA Rule 1250, subject to "minor changes."

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

Steven Lofchie; [email protected]

Jeffrey Robins; [email protected]

Maurine Bartlett; [email protected]

Glen Barrentine; [email protected]

Cross References

FINRA Rule 1230 (proposed to be amended)

FINRA Rule 1250

NASD Rule 1120

FINRA RN 09-70 (requesting comment on proposed registration and qualification requirements)

Comments received on RN 09-70