SIFMA Develops Certificate for FINRA Rule 2111

The Securities Industry and Financial Markets Association (SIFMA) developed an Institutional Suitability Certificate to facilitate broker/dealer compliance with new FINRA Rule 2111, specifically when dealing with institutional clients. 

The Financial Industry Regulatory Authority’s (FINRA) Rule 2111 establishes new suitability requirements that broker/dealers must satisfy when recommending transactions or investment strategies involving securities to clients. The rule provides an exception from the “customer-specific” suitability obligation for institutional accounts (as defined in FINRA Rule 4512(c)) that are capable of evaluating risks independently and affirmatively indicate to broker/dealers that they are exercising independent judgment in evaluating a firm’s securities recommendations.

The Institutional Suitability Certificate is a form that institutional clients can sign to make this indication.

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 “This form will provide an efficient way for institutional investors to elect to be treated as an institutional account by their broker/dealer(s), with access to the full range of products and services available on their broker/dealer’s institutional platform,” said Ira Hammerman, SIFMA senior managing director and general counsel.

The Institutional Suitability Certificate is available here and will be distributed and maintained by various vendors starting on or around March 1, 2012.

The deadline for compliance with FINRA Rule 2111 is July 9, 2012.

Older Adults Less Likely to be Stressed

The American Psychological Association recently released the results from its "Stress in America" survey, which found stress levels differ among generations.  

In general, older adults are less likely than younger adults to report high levels of stress, perhaps because they recognize the importance of staying healthy or have been told by a healthcare provider to reduce stress. The survey found:

 

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•  Adults are twice as likely to report increased (39%), rather than decreased (17%) stress levels over the past year. Baby Boomers (born between 1946 and 1964) are somewhat more likely than others to report a decline in their stress (23%).

•  Matures (born between 1922 and 1945), who historically have lower stress than younger generations, continue to report lower stress than the other generations. On a 10-point scale where 1 is little or no stress and 10 is a great deal of stress, Millennials (born between 1980 and 2000) average 5.4 and Gen Xers (born between 1965 and 1979) average 5.6, compared to 4.9 for Boomers and 4.5 for Matures.

•  Though their average stress level increased from last year, Matures’ stress differential (the difference between what they see as a healthy level of stress and where they place their own) is lower (0.7) than the other generations and at the lowest level of the past five years (tying 2008).

•  Gen Xers’ and Millennials’ stress differentials — the difference between each generation’s average personal stress level and their average perceived healthy stress level — are higher than Matures’ and Boomers’. Gen Xers have the highest differential of 2.0, but Millenials’ differential of 1.7 is the highest it has been in five years.

•  Boomers’ average assessments of their personal stress levels have declined steadily, from 6.5 in 2007 to 4.9 in 2011. Their perceptions of healthy stress levels have also shifted from 4.5 in 2007 to 3.4 in 2011. Overall, their stress differential has declined to the lowest level of the past five years — 1.5 — which suggests a movement toward more manageable stress.

Sources of Stress Differ Among Generations  

•  Significant stressors for Millennials, Gen Xers and Boomers are money (80%, 77% and 77%), work (72%, 77% and 64%) and housing costs (49%, 51% and 54%). But Matures (63%) are more likely to cite health problems for their families as a source of stress (compared to 60% of Boomers, 45% of Gen Xers and 46% of Millennials).

• Millennials (54%) are less likely than older adults to be stressed by the economy (66% of Gen Xers, 76% of Boomers and 71% of Matures).

• Relationships are particularly problematic for younger adults (63% of Millennials and 65% of Gen Xers).

 

The Stress in America survey was conducted online within the United States by Harris Interactive on behalf of the American Psychological Association between August 11 and September 6, 2011, among 1,226 adults aged 18 and older who live in the U.S.

 

Full survey results are available here.

 

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