FINRA is recommending the structure and governance of FINRA Regulation - adjusting the size and composition of District Committees, and replacing District Nominating Committees.  The changes would entail amending the By-Laws of the regulatory subsidiary.  Among other things, FINRA would:

• adjust the size and composition of District Committees to align more closely with the industry representation on the FINRA Board;
• replace District Nominating Committees with a process of direct nomination and election based on firm size.

    FINRA Regulation (fka "NASD Regulation") is a ...  subsidiary of FINRA that operates according to the Plan of Allocation and Delegation of Functions by NASD to Subsidiaries, as amended, which was first adopted at NASD Regulation’s formation in 1996.

    Modifying FINRA Regulation By-Laws.    With regard to District Committees, FINRA would:

• adjust the size and composition of District Committees over a 3-year transition period to align more closely with the industry representation on the FINRA Board;
• replace District Nominating Committees with a process of direct nomination and election based on firm size;
• codify current practice that District Committees meet on a regional basis;
• eliminate the Advisory Council;
• amend the qualification requirements and prescribe further term limits for District Committee members;
• revise procedures for qualification and accounting of ballots to be administered solely by an Independent Agent; and
• make other procedural and administrative changes.

    Role of District Committees Significantly Narrows.   District Committees had been called on to serve as the District Business Conduct Committees for their respective districts.  However, under sanctions issued under the 1996 SEC Settlement Order against NASD, it was provided, among other things, that District Committees no longer would be involved in deciding whether or not to institute disciplinary proceedings, and that District Committees would no longer be involved in the review or
approval of membership applications.

    FINRA Regulation's 11 District Offices, 5 Regions:

• West Region - Districts 1 (SF), 2 (LA), and 3 (Denver, Seattle);
• Midwest Region - Districts 4 (KC), 8 (Chicago);
• South Region - Districts 5 (N.O.), 6 (Dallas), 7 (Atlanta,Boca Raton);
• North Region - Districts 9 (Phila., PA, Woodbridge, NJ); and 11 (Boston); and
• New York Region - District 10 (NYC, Long Island).

For further details, go to:   [FINRA Rule Filing 11-11, 2/5 ]