BDA Submits Comment Letter to the SEC on FINRA 4210 Margin Amendments

In response to the SEC’s request for comment, BDA submitted the following comment letter.
BDA’s letter focuses on the following issues:
  • The legal and compliance cost burdens for middle-market dealers to implement and continue to maintain the requirements of this proposed rule
  • The fact that the proposed margin amendments will not have a fair and equitable impact on mortgage market participants and, therefore, the amendments violate Exchange Act Section 15A(b)(6)
  • BDA argues that FINRA does not have the statutory authority to adopt a margin rule for the exempt securities defined as ‘covered agency securities’ by FINRA in the proposed rule
  • BDA urges FINRA to exclude specified pools, ARMs, and CMOs from the scope of the proposed rule
  • Finally, BDA urges the SEC to disapprove the rule unless significant changes are made and FINRA’s legal authority is clarified
The original Rule 4210 margin amendments that FINRA filed with the SEC in October 2015 can be read here.
BDA submitted a comment letter to the SEC in November 2015.
BDA met with the SEC, FINRA, and key Congressional committees in January.

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