05.06.25

FINRA Defends Outsize Biz Rule Proposal

by: Alex Padalka

The Financial Industry Regulatory Authority (FINRA) is hitting back at critics of its recent proposal on updating its regulations on brokers' and employees' outside business activities. In March, FINRA issued a request for comment on its proposal to "streamline and reduce unnecessary burdens" and address what it called a "dichotomy" created by the two different rules that are currently in place: one for registered brokers and a separate one for "associated persons," or those merely affiliated or associated with a broker-dealer. FINRA said that "several recent statements published in news media mischaracterize" its proposal. The industry watchdog said statements suggesting that there were new reporting and approval requirements imposed by the proposal are incorrect, as the proposed changes are meant to reduce such obligations.

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