The U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness (“CCMC”) appreciates the opportunity to share our views on the Financial Industry Regulatory Authority, Inc.’s (“FINRA”) regulatory notice on complex products and options (the “Notice”). The purpose of Notice 22-08 is to remind financial professionals of their regulatory obligations regarding complex products and options and to solicit comment on effective practices and rule enhancements.
As the Notice explains, FINRA has “taken steps to address complex products and options over the years,” among which include:
- a process with which members must comply when opening a customer’s brokerage account for options, including ongoing supervisory reviews of those accounts;
- a comprehensive framework of rules to address specific products, including options, security features, direct participation programs, deferred variable annuities, index, currency index, and currency warrants; · comprehensive risk-based examinations; and
- an enforcement process through which FINRA is able to sanction any professionals for violations of its rules. Such guidance, rules, examinations, and enforcement help FINRA to meet its mission of protecting investors and safeguarding market integrity in a manner that facilitates vibrant capital markets.