Common use of Statutory Basis Clause in Contracts

Statutory Basis. The proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act, which requires, among other things, that FINRA rules must be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. FINRA believes that the proposed rule change would result in minimal costs to member firms, while providing additional investor protections where such policies do not currently exist, are not consistently applied or are less restrictive than the proposed changes. The proposed rule change will ultimately benefit the investor community, and promote greater trust in the brokerage industry, by reducing the potential exploitation of vulnerable investors. FINRA believes that establishing an industry-wide benchmark for situations in which registered persons request member firm approval to be named beneficiaries or to positions of trust mitigate potential conflicts of interest consistently across the industry for all customers.