FINRA Publishes 2022 Report on Exam and Risk Monitoring Program

The newly released 2022 Report on FINRA’s Examination and Risk Monitoring Program reflects an evolving securities industry. “Today’s securities industry landscape is highly dynamic in terms of business models, technologies, products, and compliance practices. This report looks at these significant changes through the lens of FINRA’s commitment to investor protection and market integrity so that firms’ compliance programs can benefit from our findings about emerging and ongoing issues,” stated Greg Ruppert, executive vice president, member supervision, in a […]

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FINRA CEO to SIFMA Audience: Protecting Investors and Addressing Workplace Evolution are Priorities for 2022

Investor protection remains atop FINRA’s priorities for 2022. “There will be a theme around retail-investor protection,” CEO Robert Cook said, during a recent webinar hosted by SIFMA. And FINRA will proceed with some existing initiatives as well as launch new efforts in 2022, he told SIFMA President & CEO Kenneth Bentsen, Jr., in a virtual Q&A session. FINRA will also revisit rules and regulations in light of changes brought about by the COVID-19 pandemic and […]

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FINRA Weighs Lasting Impact of Remote Work

FINRA is preparing for a “new normal” in which firms will work remotely even after the pandemic passes. For example, FINRA is considering changing how it defines “branch office” and “office of supervisory jurisdiction” for supervision and inspection purposes based on industry feedback. “Many” commenters that responded to a request for feedback on lessons learned during the COVID-19 pandemic urged the regulator to revisit the definitions under FINRA Rule 3110 because firms have shifted to […]

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FINRA Extends Remote Branch Inspections Until End of 2022

FINRA has proposed to extend temporary relief allowing firms to conduct their 2022 branch inspections remotely through year-end. If approved by the SEC, the extension of FINRA Rule 3110.17 would extend COVID-related branch office inspection relief that is now scheduled to end on June 30. “The proposed additional six-month extension would provide further clarity to firms on regulatory requirements and account for the time needed for many firms to carefully assess when and how to […]

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Documentation and Compliance Key in FINRA Sweep Exams of Options Accounts

Broker-dealers need to document their firm’s processes for supervising options trading and demonstrate compliance with them in new FINRA sweep exam on option accounts. The industry self-regulator is conducting targeted examinations of broker-dealers’ supervision of options trading as part of its ongoing efforts to protect retail investors. FINRA CEO Robert Cook had indicated in July that the sweep would be coming and the regulator followed through shortly thereafter, releasing its Targeted Examination Letter on Option […]

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Broker-dealers Hope for Permanent Remote Inspections as FINRA Ponders Extension

Regulators remain open to extending remote examinations for broker-dealers into 2022 and firms hope the relief will last even longer. FINRA President Robert Cook recently reiterated the need for exams to remain remote into 2022 during a conference held by the Securities Industry and Financial Markets Association’s (SIFMA), WealthManagement reported. “What I’d like to see happen here, at least where my thinking currently is, is we would extend it into next year, and that we […]

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FINRA Annual Conference 2021: 4 Key Takeaways

Perhaps SEC Chairman Gary Gensler summed up the predominant theme of the recently concluded 2021 FINRA Annual Conference best in the comments he made in the event’s final session.  “We need to do whatever we can to ensure that bad actors aren’t playing with working families’ savings and that the rules are enforced aggressively and consistently,” Gensler said in his remarks at this year’s conference, which ran virtually from May 18-20. Traditionally one of the […]

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Regulatory Insights Regarding Compliance Assessments of Regulation Best Interest and Form CRS

These are certainly interesting days.  So much is taking the attention of compliance professionals.  By now everyone has implemented their business continuity plans (BCP) and likely made modifications to them here and there as the true test of these plans has been realized.  BCP has now become yet another compliance ball to juggle for the foreseeable future.  BCP recordkeeping will be important so be sure to track as you go.  Regulators are certain to ask […]

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Observations From FINRA’s January 2020 Disciplinary Actions Report

Outside business activities and private securities transactions were a focus of FINRA’s January 2020 Disciplinary Actions Report with at least nine (9) cases being cited within the report.  Several registered persons were sanctioned for failure to notify and obtain prior written approval from their member firm before engaging in an outside business activity or private securities transactions.   Those who failed to cooperate with FINRA’s investigation by refusing to provide on-the-record testimony have been barred from […]

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SEC and FINRA Exam Priorities to Include Firms’ AML Compliance Programs, Including Policies and Procedures

SEC’s Office of Compliance Inspections and Examinations (OCIE) has issued its examination priorities for 2020. According to the document, OCIE will assess the adequacy of firms’ AML compliance programs, including relevant policies and procedures. AML Compliance was also cited by FINRA as an area of focus in its recent 2020 Risk Monitoring and Examination Priorities Letter. “The Bank Secrecy Act requires financial institutions, including broker-dealers and investment companies, to establish anti-money laundering (AML) programs. These programs must, among […]

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