FINRA Seeks Comment On Proposal On Borrowing And Lending To Customers

FINRA is seeking comment on proposed amendments to FINRA Rule 3240 ("Borrowing from or Lending to Customers") to expand prohibitions against outside borrowing and lending agreements between registered individuals and their customers.

The proposed amendments would (i) expand the general prohibition under the rule to cover lending arrangements that may predate new broker-customer relationships and that may be entered into six months after the customer relationship has ended, (ii) expand the application of the rule to arrangements involving a customer of the registered individual transacting with a family member of the registered individual and (iii) better define the exceptions to the prohibition.