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 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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On June 5, 2019, the SEC voted to adopt a package of rulemakings and interpretations regarding broker dealers’ and investment advisers’ standards of conduct, including new Regulation Best Interest, new Form CRS Relationship Summary, and two interpretations under the Investment Advisers Act of 1940. Under Regulation Best Interest, broker dealers will be required to act…
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FINRA is requesting comment on proposed Rule 4111 (Restricted Firm Obligations) that would impose obligations, including financial requirements, on designated member firms that cross specified numeric disclosure-event thresholds. FINRA believes that the proposal would promote investor protection and market integrity and provide another tool to incentivize broker dealers to comply with regulatory requirements and to…
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FINRA recently issued Regulatory Notice 19-10 presenting FINRA’s policy and guidance on how broker dealer firms should guarantee all communications with customers be fair, balanced, and not misleading, as required by FINRA Rule 2210, in the event of a registered representative’s departure. The Notice states that when faced with the departure of a representative, firms…
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FINRA recently announced a self-reporting initiative to promptly compensate harmed investors and promote firms’ compliance with the rules governing the recommendation of 529 savings plans. 529 plans are tax-advantaged plans that are designed to encourage saving for the future educational expenses of a designated beneficiary, and shares are commonly sold in different classes, with fees…
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FINRA released its 2019 Risk Monitoring and Examination Priorities Letter. Compared to previous years, this Letter takes a novel approach by highlighting those topics that will be materially new areas of focus for FINRA’s risk monitoring and examination programs this year. The Letter also identifies areas of ongoing concern that FINRA will continue to review….
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FINRA currently allows non-attorney representatives to work with investors filing securities arbitration claims and throughout mediation. FINRA’s Board of Governors recently approved filing with the SEC amendments to the Codes of Arbitration and Mediation Procedure which would prohibit non-attorney representatives from practicing in the arbitration and mediation forums. This move comes after FINRA issued a…
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FINRA published its 2018 Report on Examination Findings, its second annual report detailing observations from recent examinations of broker-dealer firms that it considers worth highlighting because of their potential significance, frequency, and impact on investors and the markets. It also describes practices FINRA has observed to be effective in certain circumstances. The highlighted observations of…
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On April 18, 2018, the SEC proposed a new rule under the Securities Exchange Act of 1934 entitled “Regulation Best Interest” to establish a standard of conduct for broker-dealers and natural persons who are associated persons of a broker-dealer to act in the best interest of a retail customer when making a recommendation of any…
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