FINRA Seeks Comment on Efficacy of Current Day Trading Rules

FINRA requested comment on current requirements governing day trading.

As part of a retrospective review FINRA requested feedback on all aspects of current rules on trading strategies "where a customer effects both buy and sell transactions in the same security in the same day to profit from movements in the price of the security." FINRA said that these rules include "special requirements that apply to day trading in margin accounts; account approval requirements for customers that intend to use day-trading strategies; and risk disclosures that members that promote day-trading strategies must provide to customers."

FINRA asked for comment on, among other concerns:

• whether technological advancements, improved monitoring capabilities and changing customer behavior affect the original goals of the day trading requirements;
• whether alternative protections are warranted given current risks;
• whether current rules on day-trading account approval and risk disclosures are effective in safeguarding customers, particularly regarding suitability assessments;
• whether products or strategies with comparable risks to day trading should also be regulated similarly; and
• whether the current day trading requirements are effective in mitigating risks for individual customers and firms, and have changes like zero commissions or tighter bid-offer spreads altered these risks.

FINRA invited comment on possible amendments to these requirements, as well as on the costs and benefits for various market participants.

Comments are due by January 28, 2025.