Report from FINRA Board of Governors Meeting – September 2018

BoardFINRA Approves Rule Proposals, Welcomes New Governor and Confirms Committee Appointments

WASHINGTON – FINRA’s Board of Governors met on Sept. 26-27 at FINRA’s offices in New York, where it approved four rule proposals, welcomed a new Governor and made several standing committee appointments.

At the September 2018 meeting, the FINRA Board continued its engagement with key stakeholders by meeting with SEC Chairman Jay Clayton. The FINRA Board has hosted senior leaders from the SEC at each of its last five meetings, including Chairman Clayton, who last met with the Board at its December 2017 meeting.

“These discussions present an invaluable opportunity for the FINRA Board to hear from Chairman Clayton on the leading issues facing the industry and to continue to build on FINRA’s close relationship with the SEC,” said FINRA Chairman Bill Heyman.

New Governor and Committee Appointments

The September 2018 meeting was the first for Governor Paige W. Pierce, Senior Vice President of Larimer Capital Corp., who was elected by FINRA small firms to join the Board in August.

The Nominating and Governance Committee of the Board made several appointments to FINRA’s standing committees – which assist the Board in the execution of its responsibilities – to fill vacancies caused by recent Governor retirements and to make initial committee assignments for FINRA’s newest Governors.

“The standing committees play a vital role in carrying out FINRA’s oversight of the industry,” said President and CEO Robert W. Cook. “We rely on and appreciate the Governors’ commitment to serving on these important committees.”


The Board approved four rule proposals to be published by FINRA for comment or filed with the SEC:

Proposed Amendments to Expand Time for Non-Parties to Respond in Arbitration – The Board approved filing with the SEC proposed amendments to: (1) extend the response time for non-parties to object to an order or subpoena from 10 calendar days of service to 15 calendar days of receipt of the order or subpoena; and (2) exclude first-class mail as an option to serve documents on the non-party and as an option for the non-party to file the objection to the scope or propriety of the order or subpoena. The proposed rule change would address arbitration forum users’ concern that non-parties wanting to object to an order or subpoena have insufficient time to do so.

Expansion of TRACE to Include Foreign Sovereign Debt Securities – The Board approved publication of a Regulatory Notice seeking comment on proposed amendments to expand the Trade Reporting and Compliance Engine (TRACE) rules to include transactions in U.S. dollar-denominated foreign sovereign debt securities. Issuance in these securities has accelerated in recent years and FINRA believes the proposal would provide important regulatory information on an increasingly active segment of the market. Under the proposal, trades in foreign sovereign debt securities would be subject to same-day reporting and would not be disseminated publicly.

Potential Amendments to Margin Requirements for Covered Agency Transactions – The Board approved revisions to the Covered Agency Transaction margin requirements that would: (1) eliminate the 2-percent maintenance margin requirement; (2) allow firms to take a capital charge in lieu of collecting margin for mark to market losses, subject to specified limitations and conditions; and (3) streamline the rule language. The revisions respond to competitive impact concerns raised by small firms in connection with recent changes in these requirements.

Proposed Amendments to FINRA’s Margin Rule to Clarify the Treatment of “When Issued” and Other Extended Settlement Transactions – The Board approved publication of a Regulatory Notice seeking comment on amendments to margin requirements that would clarify and incorporate into the rule current interpretations regarding “when issued” and other extended settlement transactions, and would provide relief to facilitate the practical application of the rule to extended settlement transactions.

More information regarding the Board’s operations, including the membership and responsibilities of its committees, is available at