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Practice Area: Securities

Finra Amends Arbitration Code To Expand Options For Customers If A Firm Or Associated Person Is Or Becomes Inactive

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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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Sec Issues Guidance On Regulation Best Interest

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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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Highlights From The Finra 2020 Risk Monitoring And Examination Priorities Letter

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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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Finra Releases December 2019 Board Of Governors Meeting Report

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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 Requests Comment On A Proposed Rule To Limit A Registered Person From Being Named A Customer’s Beneficiary Or Holding A Position Of Trust For Or On Behalf Of A Customer

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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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Finra Publishes 2019 Report On Examination Findings And Observations

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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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Finra Provides Guidance On Disclosure Innovations In Advertising And Other Communications With The Public

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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 Issues Guidance On Member Firms’ Supervisory Obligations When Participating In Investment Related Activities With Municipal Clients

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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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Finra Requests Comment On Rules And Issues Relating To Senior Investors

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FINRA commenced a retrospective review of its rules and administrative processes meant to help protect senior investors from financial exploitation and is now requesting comment on suggested changes to and creation of rules and administrative processes addressing the issue. FINRA is requesting feedback on proposed expansions to Rule 2165, which permits a member firm to…
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Finra Issues Guidance On Cooperation By Broker Dealers And Brokerage Firms During Regulatory Investigations

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FINRA recently issued Regulatory Notice 19-23 addressing “extraordinary cooperation” by broker dealers and broker dealer firms.  The Notice highlights FINRA’s hopes to incentivize broker dealers and broker dealer firms to take “proactive and voluntary steps beyond those required under FINRA rules” by crediting such cooperation in FINRA’s regulatory enforcement decisions. The Notice also clarifies the…
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