FINRA Proposes Rule to Extend Expiration Date of Rule 0180, Disapplying FINRA Rules to Security-Based Swaps (Fed. Reg.)

The FINRA proposal to extend the expiration date of FINRA Rule 0180 ("Application of Rules to Security-Based Swaps") to February 11, 2016 was published in the Federal Register.

Generally, the extension has the effect of disapplying most of FINRA's rules to security-based swaps, even though such swaps are "securities" for purposes of the Securities Exchange Act. FINRA explained that it is "appropriate and in the public interest" to extend Rule 0180 in order to "avoid undue market disruptions resulting from the change of the definition of 'security'" under the Securities Exchange Act, at least in cases in which the SEC has not itself adopted rules to govern security-based swaps.

FINRA stated that it will amend the expiration date of Rule 0180 in subsequent filings, as necessary, so that the expiration date will be coterminous with the termination of relevant provisions of the SEC's temporary exemptions.

While the extension is effective immediately, interested parties may submit comments on the proposal until February 11, 2015.

See: 80 FR 2983.Related news: FINRA Proposes to Extend Expiration Date of Rule 0180 ("Application of FINRA Rules to Security-Based Swaps") (January 8, 2015).