Special Notice: FINRA Engagement Initiative

Dear Ms. Mitchell:

STA1 welcomes the opportunity to offer comment on FINRA Special Notice (the “Notice”) Engagement Initiative. We greatly respect and appreciate FINRA’s 360 Review, in particular this request for comment on FINRA’s Engagement Initiatives.

STA’s diverse membership, as measured by geography and business models, and long history of interacting with FINRA and its preceding organizations offers a unique perspective on FINRA’s Engagement Initiatives which we hope will contribute favorably to any strategic decisions made by FINRA.

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FINRA Safe Harbor on Desk Commentary

Dear Ms. Mitchell,

The Security Traders Association (“STA”) [1]welcomes the opportunity to comment on proposed amendments to FINRA Rule 2241 (Research Analysts and Research Reports) and FINRA Rule 2242 (Debt Research Analysts and Debt Research Reports) to create a limited safe harbor for “specified brief, written analysis distributed to eligible institutional investors that comes from sales and trading or principal trading personnel but that may rise to the level of a research report (desk commentary)”[2], herein referred to as, the “Proposal”, or the “Safe Harbor”. The Safe Harbor would be non-exclusive and only available to communications that meet specific conditions regarding the author, the content of the communication and the recipient of the communication. Each limitation reflects FINRA’s stated objective to ensure that retail investors retain the full protections of the research rules and that any safe harbor does not cause firms to migrate their research function to the trading desk to avoid Rules 2241 or 2242.

[1] The STA is a trade organization founded in 1934 for individual professionals in the securities industry and is committed to promoting goodwill and fostering high standards of integrity in accord with the Association’s founding principle, Dictum Meum Pactum – “My Word is My Bond”

[2] FINRA Regulatory Notice 17-16 April 2017

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FINRA Launches Web-based Regulatory Element Program

FINRA is changing the Regulatory Element of Continuing Education (CE) Program to an online format called CE Online, which will allow registered persons to complete the CE sessions via the Web instead of at a testing center.

CE Online offers many benefits to firms and registered persons, including the flexibility to complete the program at a time and location that is convenient to the registered person, and without time restrictions. Because CE Online will not be timed, participants can complete their session all at once or pause the session as often as needed. In addition, participants will not need to take time away from the office or travel to a test center. Each CE Online session will cost $55, which will be billed to the firm’s CRD account when participants complete their session.  The 120 calendar-day enrollment window for completion of the Regulatory Element will not change and participants must complete the session by the required end date of his or her CE anniversary window.

CE Online will be rolled out in two phases:

  • On October 1, 2015, the S106 (Series 6 registered Investment Company Limited Representatives), the S201 (registered Supervisors/Principals), and the S901 (Series 99 registered Operations Professionals) Regulatory Element Programs will be available on the CE Online platform.

Through December 31, 2015, the S501 Proprietary Trader CE Program for those who have a S56 Proprietary Trader (PT) Registration will remain in its current format and will continue to be offered only at the testing centers. Those who need to fulfill their S501 CE requirement by December 31, 2015, must take their sessions at a testing center at a cost of $60 per session.

  • On January 4, 2016, the S101 Program for the (Series 7 General Securities registrants and a variety of other registrations) will migrate to the CE Online and will feature a restructured format that will include personalized content in the fourth module reflective of the function of those registrations: Trading, Investment Banking/Research, Institutional Sales, Retail Sales and Operations.

Pending approval by the SEC, the S55 Equity Trader (ET) Registration and the S56 Proprietary Trader Registration will be retired and replaced with the S57 Securities Trader (TD) Registration beginning January 4, 2016. Persons holding the PT and/or ET Registrations will automatically receive the TD registration.  The S501 CE Program will be retired and those individuals with a TD registration will be required to take the S101 CE Program and select Trading as the fourth module.

See more information on the TD Registration at http://www.finra.org/industry/ce-online-proprietary-traders.

For more information about CE Online please see FINRA Regulatory Notice 15-28 or visit the CE Online page.

FINRA Registration of Associated Persons Who Develop Algorithmic Trading Strategies

Regulatory Notice

Registration of Associated Persons Who Develop Algorithmic Trading Strategies

FINRA Requests Comment on a Proposal to Require Registration of Associated Persons Involved in the Design, Development or Significant Modification of Algorithmic Trading Strategies

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