FINRA Proposes to Except Certain Transactions from Rule 11900 (Clearance of Corporate Debt Securities) | Practical Law

FINRA Proposes to Except Certain Transactions from Rule 11900 (Clearance of Corporate Debt Securities) | Practical Law

FINRA proposed to amend Rule 11900 (Clearance of Corporate Debt Securities) to except certain transactions in corporate debt securities.

FINRA Proposes to Except Certain Transactions from Rule 11900 (Clearance of Corporate Debt Securities)

by Practical Law Corporate & Securities
Published on 30 Jan 2020 • USA (National/Federal)
FINRA proposed to amend Rule 11900 (Clearance of Corporate Debt Securities) to except certain transactions in corporate debt securities.
On January 17, 2020, the Financial Industry Regulatory Authority (FINRA) proposed a rule change to amend Rule 11900 (Clearance of Corporate Debt Securities) to except certain transactions in corporate debt securities.
FINRA Rule 11900 requires members or their agents that are participants in a registered clearing agency to use the facilities of a registered clearing agency to clear over-the-counter transactions between members in corporate debt securities. FINRA is proposing to amend Rule 11900 to create an exception for over-the-counter transactions between members where:
  • The same carrying member is clearing and settling both the purchase and sale side of the transaction.
  • Clearance and settlement occur through book-keeping transfers between the parties' accounts at the carrying member.
The proposed rule change will become effective on February 15, 2020.