SIFMA AMG on FINRA Complex Products and Options
Summary
SIFMA AMG provided comments to FINRA on Notice 22-08, Complex Products and Options. SIFMA AMG’s comments will focus only on the questions FINRA asks in Notice 22-08 concerning whether to impose additional regulatory requirements with respect to complex products, not on its summary of FINRA’s existing guidance to broker-dealers about recommendations of complex products to their customers, nor on issues relating to FINRA’s regulation of options. SIFMA AMG includes a variety of member firms that sponsor, advise or distribute all kinds of investment products, including some products that FINRA in the past has labeled as complex.
See also: SIFMA on FINRA Complex Products and Options
Excerpt
May 9, 2022
Jennifer Piorko Mitchell
Office of the Corporate Secretary
FINRA
1735 K Street, NW
Washington, DC 20006-1506
Re: Comments on FINRA Regulatory Notice 22-08
Dear Ms. Mitchell:
The Asset Management Group (the “AMG”) of the Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates the opportunity to provide comments to the Financial Industry Regulatory Authority (“FINRA”) on FINRA’s Regulatory Notice 22-08 concerning complex products.2 SIFMA AMG’s comments will focus only on the questions FINRA asks in Notice 22-08 concerning whether to impose additional regulatory requirements with respect to complex products, not on its summary of FINRA’s existing guidance to broker-dealers about recommendations of complex products to their customers, nor on issues relating to FINRA’s regulation of options.3 SIFMA AMG includes a variety of member firms that sponsor, advise or distribute all kinds of investment products, including some products that FINRA in the past has labeled as complex.
Notice 22-08 requests comments on whether FINRA should impose a variety of potential regulatory requirements. For example, it asks whether:
- investors should be required to be “pre-approved” by broker-dealers for transactions in complex products even for self-directed transactions,
1 SIFMA AMG brings the asset management community together to provide views on policy matters and to create industry best practices. SIFMA AMG’s members represent U.S. and multinational asset management firms whose combined global assets under management exceed $45 trillion. The clients of SIFMA AMG member firms include, among others, tens of millions of individual investors, registered investment companies, endowments, public and private pension funds, UCITS and private funds such as hedge funds and private equity funds. For more information, visit http://www.sifma.org/amg.
2 FINRA Reminds Members of Their Sales Practice Obligations for Complex Products and Options and Solicits Comment on Effective Practices and Rule Enhancements, Regulatory Notice 22-08 (March 8, 2022) (available at https://www.finra.org/sites/default/files/2022-03/Regulatory-Notice-22-08.pdf) (“Notice 22-08”).
3 SIFMA is submitting a separate comment letter on behalf of its membership on the broader issues in Notice 22-08. This comment letter is submitted solely on behalf of SIFMA AMG.