SIFMA Comments on FINRA Markup Proposal

March 28, 2011

SIFMA submitted a lengthy comment letter to FINRA regarding its recent proposal in RN 11-08 to adopt new rules on markups, commissions, and fees. Primarily, SIFMA supports the withdrawal of the 5% policy, but questions how the new rule would apply absent any clear guiding principles from FINRA. In addition, SIFMA argues that (1) FINRA should further expand the "QIB Exemption" relating to debt markups, (2) FINRA should provide further guidance on debt markups, given the "continued uncertainty and implementation difficulties under current IM-2440-2," and (3) the proposed retail equity schedules of commissions is a solution in search of a problem, given the current disclosure of commissions on a trade-by-trade basis pursuant to Exchange Act Rule 10b-10.

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 RN 11-08 (Covered in the Regulatory Update on Feb. 10, 2011)

NASD Rules 2430, 2440

NASD IM-2440-1 and IM-2440-2

NYSE Rule 375

FINRA Rules 2121, 2122, 2123 (proposed)