The US Securities and Exchange Commission (SEC or Commission) recently approved amendments to Financial Industry Regulatory Authority (FINRA) Rule 2232, which will “require member firms to disclose additional transaction-related information to retail customers for trades in certain fixed income securities[, including] … the amount of mark-up or mark-down [(collectively, Mark-Ups)] it applies to trades with retail customers in corporate or agency debt securities if the member also executes an off setting principal trade in the same security on the same trading day.” Th e amendments are not effective until May 14, 2018; however, FINRA has already issued guidance regarding the amendments (Guidance) and has also indicated that additional guidance may be forthcoming. The Guidance relates to the following four areas: (1) Mark-Up disclosure requirements, (2) content and format of Mark-Up disclosure, (3) determination of prevailing market price (PMP), and (4) requirements related to security-specific URL disclosures and time of execution. This article summarizes certain aspects of the Guidance.
The Investment Lawyer
Regulatory Monitor: FINRA Update