SEC Approves FINRA Proposal To Add CAT Compliance Disposition To Minor Rule Violation Plan

The SEC approved on an accelerated basis a FINRA proposal to add Consolidated Audit Trail ("CAT") compliance rules to FINRA's Minor Rule Violation Plan ("MRVP"). The SEC approval order was published in the Federal Register on May 20, 2020.

As previously covered, the MRVP is intended to provide "reasonable but meaningful sanctions" for violations of rules that are minor or technical and may not warrant more robust, immediately reportable disciplinary sanctions. Under the rule changes, FINRA will have the flexibility to "administer its enforcement program in the most effective and efficient manner, while still fully meeting FINRA's remedial objectives in addressing violative conduct."

The SEC deemed a full notice-and-comment period not necessary before approving the FINRA proposal. As a result, the rule change goes into effect immediately. Comments on the changes may be submitted to the SEC until June 10, 2020.

Primary Sources

1. Federal Register: Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change To Add FINRA Rule 6800 Series (Consolidated Audit Trail Compliance Rule) to FINRA's Minor Rule Violation Plan ("MRVP")

Originally published May 21, 2020

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