On November 28, FINRA consulted on rules for market making payments.
- Retrospective review of rule on payment for market making to assess if effective.
- Outlined retrospective rule review process, and sought responses from questions.
Restriction from Rule
- Review working of FINRA Rule 5250, which restricted payment for market making.
- Ban firm or associate accepting payment or consideration from an issue, affiliates
and promoters, for publishing quotation, acting as a market maker, or application. - Viewed as conflict of interest, since may influence firm’s decision to make market.
Questions Asked
- Asked if changes to market and delivery have superseded original purpose of rule.
- Experience with implementation of the rule, including ambiguities and challenges.
- Economic impact, including costs and benefits, in relation to the size of a member.
- Can FINRA make the rule, interpretation or processes more efficient and effective.
Effectiveness
