FINRA Revises Proposed “Pay-to-Play” Rules

January 4, 2016

The Financial Industry Regulatory Authority, Inc. recently filed with the Securities and Exchange Commission a revised proposal to establish “pay-to-play” rules that would regulate the activities of FINRA member firms engaging in distribution or solicitation activities with government entities on behalf of investment advisers. The revised proposal responds to comments made on a previous FINRA proposal. In addition to making certain clarifications, the revised proposal primarily differs from the prior proposal in that the revised proposal would not (i) require a member firm to provide disclosure to government entities regarding its distribution and solicitation activities or (ii) require a member firm to disgorge fees or other compensation received in violation of the rules.

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