FINRA Sets Effective Date for Broker Dealer Operations Professional Rule

July 29, 2011

FINRA published Regulatory Notice 11-33 setting October 17, 2011, as the effective date for newly adopted Rule 1230(b)(6). The rule will require FINRA members to register as Operations Professionals certain Covered Persons who are responsible for 16 categories of Covered Functions related to back-office operations. The rule includes a 60-day “identification period‚” giving firms until December 16, 2011‚ to identify all persons who‚ as of October 17‚ 2011‚ are Covered Persons and to register them by filing or amending Form U-4. Individuals who meet the definition of Covered Persons as of October 17, 2011 (called “Day-One Professionals” in the Notice)‚ and who are required to take the Operations Professional qualifying exam must register by December 16, but will have until October 17, 2012‚ to pass the exam. During this period Day-One Professionals may continue to act as an Operations Professional.

Individuals who take a position requiring registration as an Operations Professional after October 17, 2011, (called “non-Day-One Professionals”) and who must take the qualifying exam will have 120 days from the day they file a Form U-4 to pass the qualifying exam. During that 120-day period non-Day-One Professionals will be permitted to work in the position requiring registration.

Given the breadth of the Covered Functions and the more lenient exam timing for Day-One Professionals needing to take the qualifying exam, firms should start immediately working to identify all Day-One Operations Professionals in advance of the December 16, 2011‚ registration deadline.

For more information on the Operations Professional Rule, please see our prior alerts.1

For additional information concerning this alert, please contact the following lawyers:

Michael Weissmann, Partner, Broker-Dealer, 617.951.8705

Amy Kroll, Partner, Broker-Dealer Group, 202.373.6118

David Boch, Partner, Broker-Dealer Group, 617.951.8485

Roger P. Joseph, Practice Group Leader, Investment Management; Co-chair, Financial Services Area, 617.951.8247

Edwin E. Smith, Partner, Financial Restructuring; Co-chair, Financial Services Area, 617.951.8615

Tim Burke, Practice Group Leader, Broker-Dealer Group; Co-chair, Financial Services Area, 617.951.8620

1 Bingham Alert, June 30, 2011, SEC Approves Operations Professional Rule — Certain Operations Professionals Will Be Required to Register With FINRA
Bingham Alert, March 21, 2011, FINRA Files Operations Professional Registration Rule Proposal With the SEC
Bingham Alert, June 3, 2010, FINRA Proposes to Require Registration of Back Office and Operations Personnel

This article was originally published by Bingham McCutchen LLP.