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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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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