• FINRA Delays Implementation of Rule 4210
  • April 25, 2018 | Authors: James M. Cain; Meltem F. Kodaman; Raymond A. Ramirez
  • Law Firms: Eversheds Sutherland (US) LLP - Washington Office; Eversheds Sutherland (US) LLP - Washington Office
  • Earlier today, the Financial Industry Regulatory Authority, Inc. (FINRA) filed a proposal with the Securities and Exchange Commission (SEC) to further delay the implementation of amendments to its Rule 4210 that were adopted in 2016 and will require the margining of: (1) To-Be-Announced transactions, including adjustable rate mortgage transactions; (2) Specified Pool Transactions; and (3) transactions in Collateralized Mortgage Obligations, issued in conformity with a program of an agency or Government-Sponsored Enterprise, with forward settlement dates. The amendments were scheduled to take effect on June 25, 2018. The new deadline will be March 25, 2019.

    The release accompanying FINRA’s proposal indicates that numerous market participants requested that FINRA reconsider the potential impact of amended Rule 4210 on smaller and medium-sized broker-dealers. The extension of time is intended to afford FINRA an opportunity to reconsider the burdens of Rule 4210 on such broker-dealers.

    FINRA filed the proposal for immediate effectiveness and requested that the SEC waive the requirement that a proposed rule change not become operative for 30 days after its filing.

    The Proposed Rule Change is available on FINRA’s website at http://www.finra.org/industry/rule-filings/sr-finra-2018-017.