FINRA Rule Proposals and the Significance of Comments – A Five Part Series

By Geoff Hafer, Fall 2016 Student Intern

In a previous blog entitled “Wednesdays Word:  Comment Letter,” I discussed the process for submitting comment letters to proposed FINRA rule changes.  In this five-part series, we will see the process in action from start to finish.  We will begin with a case study, SR-FINRA-2016-033, a proposal to expand eligibility for the public chairperson roster.  Here, we will look not only at the text of the proposed rule change but the purpose behind it. From there we will dig into SR-FINRA-2016-033 “The Good and the Bad,” and discuss how this rule impacts investors from both sides of the spectrum.  It is important as investors to consider how a rule change can impact you not only in the short-term but long-term as well.  We will then dive more specifically in to the crux of the issue in part four of the series, SR-FINRA-2016-033 “Current FINRA Chairperson Training.”  Here we will take a close look at the current FINRA Office of Dispute Resolution Chairperson Training and perhaps some of its deficiencies in light of the proposed rule change. Ultimately, we will end the series with “Public Chairperson Training – Recommended Changes.”  In an attempt to close the gap between experience and training potentially caused by the proposed rule change, “Public Chairperson Training – Recommended Changes,” touches on several potential remedies.  This final part of the series includes the comment letter submitted by the Investor Advocacy Clinic at Georgia State University College of Law on this particular rule proposal.

Hopefully through the series you will see how seemingly minor rule changes can significantly impact you as investors and why comments can and should be submitted.  It’s important to remember, rule proposals can and have changed as a result of well-constructed comments.