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Effective Date of FINRA Rule 2040 – Payment to Unregistered Persons
August 24, 2015
FINRA Rule 2040 (“Rule”) governs the payment of transaction-based compensation by member firms to unregistered persons. The new amendment to the Rule is effective August 24, 2015.
The amended It expressly aligns the rule with Section 15(a) of the Securities Exchange Act of 1934 (SEA or Exchange Act) and its related guidance to determine whether registration as a broker-dealer is required for persons to receive transaction-related compensation and to engage in related activities. As such, Supplementary Material .01 ( Reasonable Support for Determination of Compliance with Section 15(a) of the Exchange Act) is provided to bring guidance to member firms that are uncertain as to whether an unregistered person may be required to be registered under SEA Section 15(a) by reason of receiving payments.
Click here for the SEC Notice of Proposed Rule and or FINRA Regulatory Notice 15-07.