Rule Change Updates

New FINRA Rule 3210:  Updates to Procedures for Accounts Held at other Broker-Dealers and Financial Institutions

The SEC has approved new FINRA Rule 3210, which changes procedures for accounts held at other broker-dealers and financial institutions. The rule is effective April 3, 2017.

The changes included in this new rule are as follows:

  •  An associated person must obtain prior written consent of the person’s employing firm before opening an account with another firm.
  • Prior written consent is also required for accounts of immediate family members – spouses, children—as well as other persons who are financially supported by or whose account is under control of the associated person. However, this requirement is waived if the associated person can demonstrate that no financial benefit or control exists.
  • An associated person who joins a new firm must obtain written consent of the new employer to maintain securities accounts opened at other financial institutions within 30 calendar days of association with the new firm.
  • When opening a new account, an associated person must provide written notice of employment with another FINRA firm prior to opening the account.
  • Duplicate copies of confirmations and statements must be sent by other financial institutions if requested in writing by the employing firm.

These rules do not apply to transactions in unit investment trusts, municipal fund securities in Section 529 Plans, variable contracts or mutual funds (redeemable investment company securities).

To read more about new Rule 3210, check out http://www.finra.org/industry/notices/16-22.

All FINRA exams are likely to include questions on these changes after the April effective date. Our materials and classes will be updated to reflect this change.

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Written by Marcia Larson
Marcia Larson is Vice President, Faculty, at Knopman Marks Financial Training, New York, NY. She has extensive experience in financial licensing and regulatory training, having authored, developed and presented courseware for numerous securities and insurance exam preparation and continuing education and compliance programs. Before joining Knopman Marks, Marcia was Director of Annuity Products and Business Development at CUNA Mutual Group, where she developed and marketed industry-leading annuity products and retirement solutions and implemented distribution relationships. She was previously VP, Securities Products for Kaplan Financial, managing securities training products and subsequently, international training and businesses development. Marcia has trained thousands of financial industry exam candidates throughout their careers, and also college students as an adjunct professor. Marcia was a summa cum laude graduate of Wartburg College with degrees in Business Administration and Piano Performance. Marcia also holds the designations of Chartered Financial Consultant® (ChFC®), Chartered Life Underwriter (CLU®), Certified Employee Benefit Specialist (CEBS), and Fellow Life Management Institute™ (FLMI®). She currently teaches the SIE, Series 6, 7, 24, 50, 52, 63, 65, and 66 exams.