FINRA Considers Applying Its Rules To Security-Based Swaps

FINRA requested feedback on a concept proposal setting forth how the FINRA rules might apply to security-based swaps ("SBS").

In its Notice, FINRA suggested a number of changes that would involve revising FINRA Rule 0180 ("Application of Rules to Security-Based Swaps"), which will expire in September 2021 and currently sets forth a broad exception for SBS pending relevant SEC rulemaking on SBS. Instead, FINRA suggested setting forth "limited, targeted exceptions," and certain new amendments and requirements that would apply to SBS.

Key proposals include:

• Timing. FINRA indicated it will extend current Rule 0180 through the registration compliance date for security-based swap dealers (which is expected to be Oct. 6, 2021).