FINRA Proposes New Investment Company Rule

July 20, 2009
The Financial Industry Regulatory Authority recently proposed a new Rule to regulate the activities of its member firms regarding the sale of registered investment company securities. Based largely on NASD Rule 2830, the proposed Rule contains significant revisions in a number of areas, including disclosures that must be made to investors regarding cash compensation paid to member firms, and provides supplementary material elaborating on its requirements and the definitions of certain terms. This update reviews the proposed Rule and what steps member firms might take to remain in compliance.