FINRA Provides Guidance on Broker-Dealer Funding and Liquidity Risk Management Practices


On November 1, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 10-57 (the Notice) encouraging broker-dealers to develop and implement sound funding and liquidity risk management programs. The Notice makes it clear that FINRA expects broker-dealers to regularly assess their funding and liquidity risk managementpractices to maximize the likelihood of continued operation under adverse conditions. FINRA also expects broker-dealers affiliated with holding companies to conduct this assessment and develop these programs at the broker-dealer level regardless of whether they also implement these programs at the holding company level. In order to provide guidance to its members, the Notice sets forth some suggested practices that brokerdealers may follow in developing and implementing their funding and liquidity risk management programs.

Please see full advisory below for more information.

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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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