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Finra Seeks Comment on Outside Business Rules

May 17, 2017

Finra has requested comment from member firms about existing regulations on outside business activities and private securities trading.

The brokerage industry’s self-funded watchdog wants to assess whether the rules in place sufficiently address the issue as well as the challenges broker-dealers face in complying with them, according to a press release from Finra.

Rules governing outside business and securities trading are meant to both shield investors from risky activities and protect member firms from litigation or reputational risk arising from an employee’s outside activities, Finra says.

The comment period closes June 29.

The review of outside business activities is part of Finra’s broader initiative dubbed FINRA360 aimed at evaluating its programs and operations and identifying areas for improvement, the regulator says in the press release.

With a view to increasing Finra’s effectiveness, Robert Cook, Finra’s CEO as of last June, has been on a “listening tour” of member firms, regulators and investor advocates since August.

By Alex Padalka