Interest in engaging in a crypto business seems to be at an all-time high, including doing so in or through regulated and compliant businesses in traditional financial services firms. Brokers-dealers sit atop that list....more
FINRA recently announced targeted exams of its members focused on certain retail communications concerning “crypto asset” products and services between July 1, 2022 and September 30, 2022. For purposes of the exams, FINRA...more
FINRA recently published Regulatory Notice 22-23, providing guidance regarding firm and representative succession planning, including relevant FINRA rules and administrative processes and questions firms can consider when...more
FINRA recently highlighted Rule 3241 in the 2023 Regulatory Element Learning Plan. Rule 3241 became effective in early February 2021 and prohibits a registered person from being named as a beneficiary, executor, or...more
FINRA recently hosted a conference call with its smaller members covering Regulation Best Interest and Form CRS compliance. FINRA’s resounding message was that there is “no one-size-fits all” approach to Reg. BI...more
10/13/2022
/ Broker-Dealer ,
Compliance ,
Conflicts of Interest ,
Disclosure Requirements ,
Financial Industry Regulatory Authority (FINRA) ,
Form CRS ,
Investment Adviser ,
Investment Management ,
Regulation Best Interest ,
Regulation BI ,
Securities and Exchange Commission (SEC)
SEC staff recently served up a juicy staff bulletin covering the standards of conduct for broker-dealer and investment adviser conflicts of interest. The staff bulletin includes 13 Q&As categorized into five different...more
FINRA recently proposed amendments to FINRA Rule 3110 (Supervision) to adopt a voluntary, three-year pilot program (Pilot Program) to allow member firms to conduct remote branch office inspections. In a nod to where...more
8/17/2022
/ Broker-Dealer ,
Data Collection ,
Financial Industry Regulatory Authority (FINRA) ,
Inspections ,
Pilot Programs ,
Proposed Amendments ,
Public Comment ,
Remote Proceedings ,
Risk Assessment ,
Securities and Exchange Commission (SEC) ,
Supervision
Are the SEC and FINRA setting up shop in the metaverse? Not quite yet, but we stress yet! Like private sector businesses, U.S. financial services regulators are increasingly exploring what the metaverse, augmented...more
8/4/2022
/ Augmented Reality ,
Business Strategies ,
Compliance ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Regulatory Agencies ,
Metaverse ,
Popular ,
Regulatory Requirements ,
Remote Banking ,
Securities and Exchange Commission (SEC) ,
Virtual Reality
Back in April 2022, we wrote about the SEC killing the Dealer/Trader distinction. We also noted then that it would come as no surprise to see the SEC re-propose amendments to Exchange Act Rule 15b9-1. Just a few months later,...more
BrokerCheck is the database through which FINRA publishes licensing, registration, and disciplinary history of brokerage industry firms and their personnel. BrokerCheck does not currently specify whether a particular firm is...more
In March 2022, the U.S. Securities and Exchange Commission proposed rules that would greatly expand the Exchange Act definition of “dealer” and essentially kill the distinction between dealers and traders long-recognized by...more
7/15/2022
/ Cryptocurrency ,
Decentralized Finance (DeFi) ,
Digital Assets ,
Executive Orders ,
Financial Industry Regulatory Authority (FINRA) ,
Joe Biden ,
Market Participants ,
Proprietary Trading ,
Securities and Exchange Commission (SEC) ,
Securities Dealers ,
Securities Exchange Act
Cybersecurity and technology governance remain a top area of focus for the SEC and FINRA, as the regulators continue to concentrate on improving the overall cybersecurity posture and resiliency of the financial sector. FINRA...more
6/15/2022
/ Cyber Incident Reporting ,
Cybersecurity ,
Enforcement Priorities ,
Financial Industry Regulatory Authority (FINRA) ,
Financial Institutions ,
Financial Services Industry ,
Governance Standards ,
Policies and Procedures ,
Popular ,
SEC Examination Priorities ,
Securities and Exchange Commission (SEC)
After years of relative silence related to variable annuity exchanges on the regulatory front, the U.S. Securities and Exchange Commission announced last week settled charges against RiverSource Distributors, Inc...more
It came as no surprise that FINRA’s 2022 Examination and Risk Monitoring Program Report highlighted communications with the public as a continued area of focus. The primary theme across this focus area relates to the...more
On May 4, 2022, FINRA announced that it had fined two FINRA-registered funding portals a combined $1.75 million for failing to comply with securities laws and rules designed to protect crowdfunding investors. Funding portals...more
5/12/2022
/ Broker-Dealer ,
Crowdfunding ,
Enforcement Actions ,
Financial Industry Regulatory Authority (FINRA) ,
Fines ,
Funding Portal ,
Internal Controls ,
JOBS Act ,
Regulation CF ,
Securities Act of 1933 ,
Securities Exchange Act
The SEC recently published its 2022 Examination Priorities Letter on the heels of FINRA issuing its 2022 Examination and Risk Monitoring Program Report. One of many areas of common focus is financial management, and more...more
FINRA recently published Regulatory Notice 22-10 reminding firms of the scope of Rule 3110 (Supervision) and the potential liability of Chief Compliance Officers for failure to reasonably discharge supervisory...more
FINRA recently reminded firms of their obligation to execute marketable customer orders fully and promptly. While this seems fairly routine, what’s notable about the reminder is that “prompt” doesn’t necessarily mean what it...more
This is the first in a series of alerts discussing topics covered by FINRA in its 2022 Examination and Risk Monitoring Program Report (the “Report”). Here we take a look at Regulation Best Interest (“Reg. BI”) and Form CRS,...more
2/25/2022
/ Broker-Dealer ,
Conflicts of Interest ,
Disclosure Requirements ,
Filing Requirements ,
Financial Industry Regulatory Authority (FINRA) ,
Form CRS ,
Investment Adviser ,
Policies and Procedures ,
Regulation Best Interest ,
Retail Investors ,
Securities and Exchange Commission (SEC) ,
Training
FINRA Rules 2165 (Financial Exploitation of Specified Adults) and parts of 4512 (Customer Account Information) became effective on February 5, 2018 and implemented a framework to permit broker-dealers to place a temporary...more
On February 9, 2022, FINRA published its 2022 Report on its Examination and Risk Monitoring Program, identifying key areas of focus for broker-dealer exams this year. While each exam is unique to the firm under FINRA’s...more
On November 18, 2021, the U.S. Securities and Exchange Commission proposed new Rule 10c-1, which, if adopted, would create a new reporting and disclosure framework for the securities lending market. Rule 10c-1 would require...more
Persons registered with a broker-dealer historically have had two years from their Form U5 filing date to re-register with another firm before their prior qualifications (examinations) would lapse. This two-year window often...more
FINRA recently amended its rules in order to strengthen its tools to respond to brokers with a significant history of misconduct and the firms that employ them. The amended rules include FINRA’s Disciplinary Proceedings...more
On April 16, 2021, the staff of the SEC Division of Trading and Markets reminded broker-dealers borrowing fully paid and excess margin securities from their customers (FPL programs) that they are obligated to comply with...more