On February 7, 2020, FINRA filed with the SEC a proposed rule change to amend FINRA’s Code of Arbitration Procedure for Customer Disputes and Code of Arbitration Procedure for Industry Disputes to apply minimum fees to requests for expungement of customer dispute information. The SEC recently approved this proposed rule change in an order dated…
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FINRA recently issued Regulatory Notice 20-13 “FINRA Reminds Firms to Beware of Fraud During the Coronavirus (COVID-19) Pandemic.” The Notice was released in response to the COVID-19 pandemic, which has had a strong impact on the U.S. economy and markets. The Notice addresses measures firms should take to resolve the increased risks and challenges presented…
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FINRA amended its Code of Arbitration Procedure for Customer Disputes (Customer Code) to expand the options available to customer claimants dealing with “inactive members”—those firms or individuals whose FINRA registration has been terminated, suspended, canceled, or revoked, or who have been expelled or barred from FINRA. FINRA has amended the Customer Code to further the…
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In June 2019, the SEC adopted Regulation Best Interest. The Regulation requires broker-dealers (and natural persons associated with broker-dealers) to act in the best interest of their retail customers in making a recommendation of any securities transaction or investment strategy involving securities. Since the rule’s promulgation, there have been several questions relating to compliance with…
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FINRA released its 2020 Risk Monitoring and Examination Priorities Letter. The Letter addresses emerging priorities for FINRA’s risk monitoring, surveillance, and examination programs in the coming year. New for this year is a focus on Regulation Best Interest and Form CRS. On June 5, 2019, the SEC adopted Regulation Best Interest which establishes a “best…
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The FINRA Board of Governors met on December 4-5, 2019 to discuss the organization’s 2020 proposed budget, reaffirm its Financial Guiding Principles, discuss several operational updates, and approve two rule proposals. Of noted importance to our clients, the Board approved two rule proposals to be filed with the Securities and Exchange Commission (SEC). Both proposed…
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FINRA is seeking comments on a new rule proposal that would limit any registered person of a broker-dealer from being named a beneficiary, executor or trustee, or to have a power of attorney or similar position of trust, for or on behalf of a customer. FINRA believes being a customer’s beneficiary or holding a position…
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On October 16, 2019, FINRA published its 2019 Report on Examination Findings and Observations (“The Report”). The Report essentially details observations from recent examinations of broker-dealer firms. In the past, broker-dealer firms have used these reports to anticipate potential areas of concern and improve their procedures and controls accordingly. The topics addressed in the 2019…
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In recently published Regulatory Notice 19-31, FINRA responded to questions regarding how members can comply with FINRA’s communications rules, Rules 2210 through 2220, when using electronic media. FINRA issued this guidance to facilitate simplified and more effective disclosure in communications with the public, particularly in the context of members’ marketing and advertising of their products…
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FINRA recently issued Regulatory Notice 19-28 addressing member firms’ supervisory responsibilities as it pertains to customer accounts owned by municipal entities. The guidance was issued to clarify misconceptions surrounding the definition of the term “municipal advisors” and to ensure compliance with relevant FINRA and SEC regulations. The term “municipal advisor” refers to any individual, who…
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