FINRA Rule Consolidation Chart

The adoption of a unified set of rules has been the eagerly awaited product of the merger of National Association of Securities Dealers (NASD) and New York Stock Exchange (NYSE) regulation into Financial Industry Regulatory Authority (FINRA). The consolidated FINRA rulebook is being rolled out in installments, and in this Commentary, Melvin G. Moseley, Jr., a partner at Warner Norcross & Judd, LLP., discusses the rulebook consolidation process and the latest rule changes. He writes:
     The latest revision to the Financial Industry Regulatory Authority (FINRA) rulebook establishes new procedures for handling motions to dismiss in arbitration cases. The most dramatic change to FINRA’s dispute resolution rules is a severe limitation on respondent’s ability to file a dispositive motion before investors have had an opportunity to present the merits of their claim. The new rules also include stringent new sanctions against parties that engage in abusive dismissal motions practice.
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     A less contentious change affecting the FINRA Codes of Arbitration Procedure for Customer and Industry Disputes is an amendment to the Submission Agreement, the document that claimants and respondents must sign before entering into arbitration, which went into effect February 9. The amendment to the agreement (1) clarifies that investors may be relying on their attorneys or other representatives in attesting that they have read all the rules; however, the parties themselves continue to be bound by the procedures and rules, whether or not they have read them personally; (2) requires parties to indicate in what capacity they are signing the agreement, so that FINRA can determine whether he or she is authorized to sign the agreement; (3) converts the document to a FINRA-specific agreement by replacing generic references with "FINRA," expressly referencing the FINRA Code of Arbitration Procedure, and removing the term "Uniform" from the title of the agreement; and (4) makes some stylistic changes to the document that FINRA believes will make it easier to read.
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     Meanwhile, new FINRA rules relating to warrants, options, and security futures will take effect February 17, 2009, in the latest phase-in of the Consolidated FINRA Rulebook. This rule change adopts, with minor changes, the existing NASD rules pertaining to these derivative securities and deletes the corresponding provisions in the New York Stock Exchange (NYSE) rules regarding warrants and options.
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