This week, FINRA published its Regulatory and Examinations Priorities Letter providing member firms and industry professionals with information about FINRA plans for 2017. While not comprehensive or all inclusive, FINRA’s letter provides helpful insight into current priorities and trending business or regulatory issues that FINRA has developed based on observations from their regulatory programs, as well as input from various stakeholders, including investor advocates, member firms and other regulators.
Here are a couple notable items:
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High-risk and Recidivist Brokers. FINRA will evaluate member firms’ branch office inspection programs, as well as their supervisory systems for branch and non-branch office locations, including, but not limited to, independent contractor branches.
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Sales Practices. Senior investors and product suitability issues will continue to be an area of focus.
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Financial Risks. FINRA will review member firms’ implementation of the amended risk requirements set forth in Rule 4210.
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Operational Risks. Cybersecurity and AML remain areas of focus. FINRA will review member firms’ testing of their internal supervisory controls, whether firms have implemented adequate controls and supervision to protect customer assets pursuant to Rule 15c3-3.
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Market Integrity. Market access rule compliance and ATS disclosures continue to be areas of focus.
FINRA encourages compliance staff, supervisors and senior business leaders to review the issues and topics addressed in its letter.
