Yet More Delays to FINRA's Proposed Rule Amendments to Rule 4210 Margin for Covered Agency Transactions

FINRA recently filed a proposed rule change with the SEC to yet again delay the implementation date to October 25, 2023, for amendments to Rule 4210 (Margin Requirements) for Covered Agency Transactions.

FINRA originally filed the rule proposal with the SEC on October 6, 2015, to amend FINRA Rule 4210 to establish margin requirements for (1) To Be Announced (“TBA”) transactions, inclusive of adjustable rate mortgage (“ARM”) transactions; (2) Specified Pool Transactions; and (3) transactions in Collateralized Mortgage Obligations (“CMOs”) (collectively, “Covered Agency Transactions”). The SEC approved the proposal on June 15, 2016.  The Industry sought clarification regarding implementation, requested FINRA reconsider the potential impact on smaller and mid-sized firms and requested that FINRA extend the implementation date.

In response to these concerns, FINRA began a multi-year series of extensions to the implementation date of the requirements (other than the risk limit determination requirements), most recently to April 24, 2023.  This latest proposed rule change will further extend the implementation to October 25, 2023.   As the market for covered agency transactions has significantly changed since 2016, we may see yet additional extensions, amendments and industry comments.