NASAA Urges FINRA to Tighten Restrictions on BD Employees Borrowing from Customers

The North American Securities Administrators Association ("NASAA") criticized FINRA's proposed amendment to FINRA Rule 3240 ("Borrowing From or Lending to Customers") on broker-dealers borrowing from or lending to customers.

The proposed amendment would restrict broker-dealer employees entering into borrowing or lending relationships with customers of the broker-dealers. NASAA argued that such credit practices should be banned outright or, if not banned, subject to substantial additional conditions.