On April 23, 2015, FINRA proposed Rule 2272 to implement the Military Act requirements and the SEC published the notice to solicit comments on the proposal on May 6, 2015.  Comments are due on or before June 2, 2015. Proposed Rule 2272 would require:
Three Takeaways from Proposed Rule 2272
One: This overall proposal is not controversial because it is implementing Congressionally mandated requirements that are already laid out in the amendments to the Exchange Act and some of the requirements basically already existed, including suitability protections. However, there are new obligations that firms will need to include in amendments to supervisory procedures and disclosure documents. Further, once the rules are adopted and go into effect, FINRA will be examining for implementation and compliance.
Two: FINRA states that they “will read with interest comments as to whether proposed Rule 2272 should be broadened to apply to sales or offers of sales of securities both on and off the premises of a military installation to any member of the U.S. Armed Forces or a dependent thereof.” (Rel. 34-74890, at p. 5, emphasis added.) This would create a broader obligation than required by the Military Act and the amendments to the Exchange Act. Those with opinions and perspectives on this issue should be aware of the June 2nd comment deadline and make their views known for the regulators to consider.
Three: FINRA states there will be increased costs to broker-dealers due to the additional disclosure requirements and associated requirements to ensure that supervisory policies and procedures are adopted and implemented. FINRA notes, however, that the additional disclosures may be provided at the same time that other mandated disclosures occur. This will help mitigate any additional costs. (Rel. 34-74890, at p. 7.)
 SEC Release No. 34-74890; File No. SR-FINRA-2015-009. Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of a Proposed Rule Change to Adopt FINRA Rule 2272 to Govern Sales or Offers of Sales of Securities on the Premises of Any Military Installation to Members of the U.S. Armed Forces or their Dependents. Here is the link to the release: /wp-content/uploads/2015/05/34-74890-1.pdf The release was published in the Federal Register on May 12, 2015. Fed. Reg. Vol. 80, No. 91 at 27220.
 SEC Release No. 34-74890 at 4.
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