The North American Securities Administrators Association ("NASAA") criticized FINRA's proposed amendment to FINRA Rule 3240 ("Borrowing From or Lending to Customers") on broker-dealers borrowing from or lending to customers.
The proposed amendment would restrict broker-dealer employees entering into borrowing or lending relationships with customers of the broker-dealers. NASAA argued that such credit practices should be banned outright or, if not banned, subject to substantial additional conditions.
Primary Sources
- NASAA Letter regarding Regulatory Notice 21-43: Prohibition on Borrowing from or Lending to Customers
- FINRA Regulatory Notice 21-43: Proposed Amendments to FINRA Rule 3240 and Retrospective Rule Review Report
- FINRA Rule 3240: Borrowing from or Lending to Customers
- FINRA Rule 3241: Registered Person Being Named a Customer's Beneficiary or Holding a Position of Trust for a Customer
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