FINRA recently released an update from Chairman/CEO Rick Ketchum summarizing recent rulemaking items considered by the FINRA Board at their July 2012 meeting. A few things here are noteworthy. Initially what caught my eye is the forthcoming filing with the SEC to expand the MRV plan (minor rule violation) to increase the rules for which a MRV letter is eligible. The MRV is a disciplinary action that falls somewhere between informal action (such as a cautionary action letter or compliance conference) and a formal action (an AWC or formal complaint). MRVs impose fines of up to $2500 on a firm or individual for rule violations, but are not considered formal disciplinary actions, and therefore don't have as much disclosure ramifications as formal actions. In my view, the MRV is a good tool for FINRA to have in its toolbox, but is one that is under-utilized. According to the update, FINRA will file with the SEC proposed amendments to expand the list of rule violations appropriate for MRV resolution, noting that "The proposed additional rules generally involve non-willful technical violations that do not involve direct customer harm." I'm curious to see the list once the filing is made.
Another announcement that caught my eye has to do with another proposal to be filed with the SEC, which will seek to amend Rule 8313 to expand the ability of FINRA to release disciplinary information to be more "transparent" Over the recent several years, there has been a push for more disclosure of disciplinary information on cases and charges made against brokers and firms. I believe that we can expect to see this type of push continue.
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