FINRA Sets Effective Date For Mark-up/Mark-down Disclosure Requirements

FINRA notified member firms that the SEC approved FINRA amendments to Rule 2232 in order to require the disclosure of markups on certain transactions in corporate debt or agency securities with retail customers (i.e., customers that are not institutional accounts as defined in FINRA Rule 4512(c)). For covered transactions, the amendments require dealers to disclose mark-ups or mark-downs from the prevailing market price for the relevant security on the customer confirmation that the dealer sells or buys the security to or from a retail customer, and then buys or sells the same security as principal in an equal or greater amount on the same day from another party.

FINRA noted that the final amendments will become effective on May 14, 2018, which is the same date as the effective date for the MSRB's parallel confirmation disclosure requirements.