The SEC recently approved an amendment to FINRA Rule 9251, Inspection and Copying of Documents in Possession of Staff, that explicitly protects from discovery during FINRA proceedings those documents that federal law prohibits FINRA from disclosing. The amendment becomes effective 12/2/11. FINRA Rule 9251 describes the types of documents that FINRA’s Enforcement and Market Regulation Departments must produce to respondents during the discovery phase of a FINRA proceeding.  The rule also explicitly protects certain types of documents from production.

- e.g., Currently, Enforcement and Market Reg may withhold documents protected by attorney-client privilege or work-product immunity.

The rule, however, previously did not explicitly protect from discovery documents that federal law prohibits FINRA from disclosing - which meant that, in order to withhold a particular document, a hearing officer's “good cause” determination had to be obtained. That will no longer be necessary.  The rule amendment will increase efficiency by eliminating unnecessary briefs and hearing officer rulings. FINRA Staff Contacts. Direct questions to:  James Wrona - (202) 728-8270;  Matthew Vitekb - (202) 728-8156.  Both are with Office of General Counsel. For further details, go to:   [FINRA RegNote 11-50, November 2011]