Outside Business Activity Rule Review “Surprisingly Controversial,” Admits Finra Chie
September 18, 2019 by Mrinalini Krishna
As a part of its current retrospective review of rules, Finra has sought comments on a proposed rule to govern the outside business activities of advisors. But a year and a half later, Finra CEO Robert Cook said the new proposal “turned out to be surprisingly controversial within the industry” and that “different parts of the industry have different views about one element in particular.”
The new rule was proposed to replace Finra Rule 3270 (Outside Business Activities of Registered Persons) and Finra Rule 3280 (Private Securities Transactions of an Associated Person).
“The area that caused the most friction within the industry was the proposal that outside activities that were being conducted through an unaffiliated investment advisor would not be subject to supervision,” said Cook, speaking Wednesday at a conference in New York.
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