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FINRA's Expanded Obligations For Broker-Dealers

Law360 (February 18, 2011, 1:02 PM EST) -- On Oct. 7, 2011, two new Financial Industry Regulatory Authority rules will become effective: Rule 2090 (Know Your Customer) and Rule 2111 (Suitability). The rules amend and replace New York Stock Exchange Rule 405 and National Association of Securities Dealers Rule 2310.

Rule 2090 requires members to gather essential facts concerning each customer at the time the account is opened and at regular intervals over the length of the customer relationship.

Rule 2111 expands previous suitability requirements for broker-dealers. Rule 2111 extends the broker’s suitability obligations...
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