SEC Approves FINRA Rule Proposal to Repeal NYSE Rule 312(f)
October 7, 2009
On September 11, 2009, the SEC published a release approving changes proposed by FINRA that would adopt without any material changes NASD Rules 2240 (Disclosure of Control Relationship with Issuer), 2250 (Disclosure of Participation or Interest in Primary or Secondary Distribution) and 3340 (Prohibition on Transactions, Publication of Quotations, or Publication of Indications of Interest During Trading Halts) as rules in the Consolidated FINRA Rulebook, such rules to be redesignated, respectively, as FINRA Rules 2262, 2269 and 5260. Significantly, in connection with the redesignation of NASD Rule 2240 as new FINRA Rule 2262, the SEC also approved the repeal of existing NYSE Rule 312(f), which (like NASD Rule 2240) addresses conflict of interest issues when a NYSE member firm engages in certain activities involving the securities of an entity with which it is in a control relationship. The effective date of the new FINRA rules and corresponding repeal of NYSE Rule 312(f) has not yet been announced. The attached memo describes this recent SEC action in greater detail.