Regulation And Legislation

Graceland: Regulators offer extensions in wake of Sandy

New York City's Financial District took a pounding

Finra and SEC to provide grace period on certain filings for firms located in areas hit by massive storm

The Financial Industry Regulatory Authority Inc. and the Securities and Exchange Commission have issued updates to financial firms hit by Hurricane Sandy, offering some grace periods on making filings and settling trades.

Finra is granting trade-settlement extensions to customers on a case-by-case basis, the regulator said on its website, but only for customers located in regions affected by the hurricane who cannot make payment as a result of the storm. For brokerage firms unable to transmit requests for extensions, Finra said it will accept late filings on the next available business day.

In response to a request from Finra, the SEC has agreed to let clearing firms delay customer reserve computations based on balances from last Friday. No computations are due before month end. The extension applies only to firms that are unable to access systems or personnel necessary to complete the computation as a result of Sandy, Finra said on its website.

The SEC’s EDGAR system for securities filings is operating normally, the commission’s website says. “During this weather emergency, we understand that filers may be unable to submit their filings,” the SEC stated. “You should file when you are able. The [SEC] will handle requests for filing date adjustments on a case by case basis.”

The SEC also said firms that had to close out short positions due to failures to deliver securities could do so when the equity markets reopen.

U.S. markets look set to re-open on Wednesday.

SEC spokesman John Nester wrote in an email, “We have been in close consultation with the markets throughout and support their decision to reopen tomorrow. We will continue to work with the markets as preparations are made.”

On Tuesday, SEC offices in Washington, D.C., New York and Philadelphia were closed.

Finra offices in Washington, D.C., Maryland, New York City, Long Island, Woodbridge, N.J., Philadelphia and Boston remained closed Tuesday.

Finra is telling firms that need to reach a closed office to contact its call center at (301) 590-6500. The self-regulator earlier encouraged member firms in the affected areas to prepare to implement business-continuity plans.