Feb 26, 2013

Thinking Ahead: Preparing for implementation of FINRA’s new Front-Running Rule 5270

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On September 4, 2012, the Securities and Exchange Commission (the “SEC”) approved FINRA’s new front-running rule, Rule 5270 (“Rule 5270” or “the Rule”). The Rule replaces NASD Interpretive Material IM-2110-3, which, generally speaking, applies only to equities and equity options. The Rule is notable in its scope: it is applicable not only to equity securities but to all securities, including fixed-income securities, but also to “related financial instruments”, a broadly defined category that includes derivatives.

FINRA published Regulatory Notice 12-52 announcing SEC approval. In that Regulatory Notice, FINRA set an effective date for the Rule of June 1, 2013.

With the effective date now approximately three months away, many firms are now adding implementation of the Rule to their already overburdened compliance plate. Firms are discovering that the breadth of the new Rule is creating some daunting challenges in respect of implementation.

View full memo, "Thinking Ahead: Preparing for implementation of FINRA’s new Front-Running Rule 5270"

Autoren und Mitwirkende

Charles Gittleman

Of Counsel

Financial Institutions Advisory & Financial Regulatory

+1 212 848 7317

+1 212 848 7317

New York

Russell Sacks

Partner

Financial Institutions Advisory & Financial Regulatory

+1 212 848 7585

+1 212 848 7585

New York

Steven Blau

Associate

Financial Institutions Advisory & Financial Regulatory

+1 212 848 8534

+1 212 848 8534

+1 416 360 2154

+1 416 360 2154

New York