On January 5, 2016 FINRA released its annual Regulatory and Examination Priorities Letter identifying its 2016 areas of focus, as well as areas of historical focus. FINRA identified three priority focus areas for 2016: (1) culture, conflicts of interest and ethics, (2) supervision, risk management and controls, and (3) liquidity. While these broad areas of focus have received attention in previous years, in light of market innovation – including improved technology, new trading techniques, and diverse compensation structures – FINRA encourages member firms to proactively manage their compliance and risk procedures.

Firm Culture -

FINRA defines “firm culture” as “the set of explicit and implicit norms, practices, and expected behaviors that influence how firm executives, supervisors and employees make and implement decisions in the course of conducting a firm’s business.”1 FINRA’s 2016 assessments will focus on how firm culture affects compliance efforts and risk management programs. FINRA identified five key indicators of firm culture...