FINRA gives member firms a thumbs up on suitability rule compliance

Abstract:

Purpose –

The purpose of this paper is to interpret Financial Industry Regulatory Authority (FINRA) Regulatory Notice 13-31, which provides practical advice to member firms about how FINRA will be examining for compliance with the rule, some findings about failures to comply and a set of best practices for compliance.

Design/methodology/approach –

The paper explains the three suitability obligations set forth in Rule 2111, the mechanics of FINRA’s suitability examinations, overall findings from FINRA’s recent suitability examinations, and some measures and practices FINRA has highlighted that could bolster a firm’s suitability-focused supervisory and compliance procedures.

Originally published in Journal Of Investment Compliance on November 22, 2013.

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Topics:  Customer Funds Protection, Due Diligence, FINRA, Risk Management, Suitability Rule

Published In: Finance & Banking Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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