FINRA Files to Extend Rule 0180 and Postpone Rule 4210 | Practical Law

FINRA Files to Extend Rule 0180 and Postpone Rule 4210 | Practical Law

The Financial Industry Regulatory Authority (FINRA) filed with the SEC for an immediate extension of Rule 0180 until February 12, 2020 as well as an immediate postponement of the implementation date of Rule 4210 until March 25, 2020.

FINRA Files to Extend Rule 0180 and Postpone Rule 4210

Practical Law Legal Update w-018-8839 (Approx. 3 pages)

FINRA Files to Extend Rule 0180 and Postpone Rule 4210

by Practical Law Finance
Published on 17 Jan 2020 • USA (National/Federal)
The Financial Industry Regulatory Authority (FINRA) filed with the SEC for an immediate extension of Rule 0180 until February 12, 2020 as well as an immediate postponement of the implementation date of Rule 4210 until March 25, 2020.
On January 29, 2019, the Financial Industry Regulatory Authority (FINRA) filed with the SEC for:
  • An immediate extension of the expiration date of Rule 0180 until February 12, 2020.
  • An immediate extension of the implementation date of Rule 4210 until March 25, 2020.

FINRA Rule 0180

FINRA Rule 0180 was implemented on July 11, 2011 and temporarily limits the application of FINRA rules to security-based swaps (SBS) in order to limit potential market disruption that could result if FINRA Rule 0180 expired prior to the implementation of SEC rules providing regulatory clarity on the application of these rules to SBS per Dodd-Frank Act definitional changes that expanded the definition of "security" under the Securities Exchange Act of 1934 (Exchange Act) to include SBS.
Rule 0180 originally expired on January 17, 2013. In February 2014, FINRA passed an extension release of Rule 0180, known as the February extension. The February extension expired annually on the 11th of February and has been renewed each year. FINRA is currently filing a proposed rule change for immediate effectiveness to extend FINRA Rule 0180 until February 12, 2020.

FINRA Rule 4210

FINRA Rule 4210 sets margin requirements that determine the amount of collateral securities customers are expected to maintain in their margin accounts. On October 6, 2015, FINRA proposed to amend Rule 4210 to establish margin requirements for:
  • To be announced transactions.
  • Specific pool transactions.
  • Covered agency transactions, which are transactions in collateralized mortgage obligations (CMOs) that are issued in conformity with a program of an agency or government-sponsored enterprise, with forward settlement dates.
This rule has been postponed several times and is currently set to go into effect on March 25, 2019. However, FINRA has proposed another immediate postponement of Rule 4210 until March 25, 2020 to allow industry participants additional time to comply with system changes.
Update: On October 25, 2019, FINRA filed an amendment to further delay the implementation of FINRA Rule 4210 until March 25, 2021.
Update: On January 10, 2020, FINRA filed a proposal to implement an additional immediate delay of the expiration date of FINRA Rule 0180 until September 1, 2021. The proposal has an implementation date of February 12, 2020. Public comment on the proposal must be submitted by February 19, 2020.