Corporate & Financial Weekly Digest

Corporate & Financial Weekly Digest

Tag Archives: FINRA

FINRA Extends Deadline To Self-Report Violations Under 529 Plan Share Class Initiative

Posted in Broker-Dealer
The Financial Industry Regulatory Authority has extended the deadline for member firms to self-report violations under the 529 Plan Share Class Initiative to April 30. The extension will allow firms to have more time to review their supervisory systems and procedures with respect to their 529 plan transactions. A more detailed discussion of the Plan… Continue Reading

FINRA Working Paper Concludes High Broker-Affiliated ATS Order Routing is Associated with Lower Fill Rates, Higher Transaction Costs

Posted in Broker-Dealer
The Financial Industry Regulatory Authority’s Office of the Chief Economist has released a working paper (Study), maintaining that institutional orders routed by brokers that send a high percentage of such orders through affiliated alternative trading systems (ATSs) tend to receive lower order fill rates and higher execution costs. The Study examined order-handling information over the… Continue Reading

FINRA Issues Information Notice Regarding Suspicious Email Sent to Member Firms

Posted in Broker-Dealer
On February 13, the Financial Industry Regulatory Authority (FINRA) published an information notice alerting member firms about a suspicious email received by compliance personnel at a number of member firms. The email, sent by a purported BSA-AML compliance officer at a credit union, describes an attempted transfer of money from a firm client that the… Continue Reading

FINRA Issues Regulatory Notice on Effective Date Extension of Margin Requirements for Covered Agency Transactions

Posted in Broker-Dealer
On February 12, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 19-05 (Notice) informing member firms that the effective date for the implementation of the amendments to FINRA Rule 4210 has been postponed. The amendments, which will establish mandatory margin requirements for certain covered agency transactions, will go into effect on March 25, 2020… Continue Reading

FINRA Releases 2019 Annual Risk Monitoring and Examination Priorities Letter

Posted in Broker-Dealer, Digital Assets and Virtual Currencies
On January 22, the Financial Industry Regulatory Authority (FINRA) issued its annual Risk Monitoring and Examination Priorities Letter. This year’s letter includes a number of new areas for firms to consider in seeking to improve their compliance, supervisory and risk management programs.… Continue Reading

FINRA Issues Regulatory Notice Regarding Updates to Supplemental Statement of Income

Posted in Broker-Dealer
On January 8, the Financial Industry Regulatory Authority issued a Notice advising its members of updates to the Supplemental Statement of Income (SSOI). The updates are designed to conform with amendments adopted by the Securities and Exchange Commission that simplify and update certain FOCUS reporting requirements applicable to broker-dealers. Pursuant to FINRA Rule 4524, the… Continue Reading

FINRA Issues Notice Related to Reporting Requirements for Auction Transactions

Posted in Broker-Dealer
On January 9, the Financial Industry Regulatory Authority issued a Notice to remind its members that they should not report auction transactions in US Treasury securities—including auction awards to either direct or indirect bidders—to the Trade Reporting and Compliance Engine (TRACE), as these transactions are excluded from the TRACE reporting requirements under FINRA Rule 6730(e)(8).… Continue Reading

FINRA Files Proposed Rule Change Regarding Arbitration Subpoenas, Orders of Appearance of Witnesses and Production of Documents

Posted in Broker-Dealer
On December 20, the Financial Industry Regulatory Authority filed a proposed rule change with the Securities and Exchange Commission to amend various FINRA Code of Arbitration Procedure Rules that govern objections in arbitration proceedings to subpoenas, orders of appearance of witnesses and production of documents by non-parties. Since non-parties to a FINRA arbitration do not… Continue Reading

FINRA Issues Report on Examination Findings

Posted in Broker-Dealer
This month, the Financial Industry Regulatory Authority (FINRA) issued a report summarizing various findings from recent examinations of its member firms (Report). In particular, the Report sets forth selected observations from recent examinations that FINRA considers worth highlighting because of their potential significance, frequency and impact on investors and the markets. The Report also describes… Continue Reading

FINRA Proposes Rule Change Relating to Rule 4512 (Customer Account Information)

Posted in Broker-Dealer
On November 28, the Financial Industry Regulatory Authority filed a proposed change to Rule 4512(a)(3) (Customer Account Information) with the Securities and Exchange Commission. FINRA Rule 4512(a)(3) currently requires member firms to obtain the “wet” signature of each named, natural person authorized to exercise discretion in an account. Members have stated that the requirement to… Continue Reading

FINRA Reminds Members of Obligations Related to OTC Securities Quoted by a Filed Form 211

Posted in Broker-Dealer
On September 24, the Financial Industry Regulatory Authority (FINRA) issued a Regulatory Notice (Notice) reminding firms of their applicable obligations when publishing a quote in an OTC security, in addition to filing a Form 211. Securities Exchange Act of 1934 (SEA) Rule 15c2-11 prevents a broker-dealer from initiating quotations in an OTC security unless such… Continue Reading

Amended FINRA Registration Rules To Take Effect October 1

Posted in Broker-Dealer
Amended Financial Industry Regulatory Authority registration, qualification and continuing education rules will become effective on October 1. The amended rules, which the Securities and Exchange Commission approved on October 13, 2017, will consolidate and replace the National Association of Securities Dealers, Incorporated New York Stock Exchange and existing FINRA registration rules.… Continue Reading

FINRA Publishes Regulatory Notice Regarding ATS Supervision Obligations

Posted in Broker-Dealer
On August 13, the Financial Industry Regulatory Authority (FINRA) issued Regulatory Notice 18-25 to remind Alternative Trading Systems (ATS) to evaluate their supervisory systems to ensure compliance with their supervision obligations, including, without limitation, with respect to business continuity, recordkeeping, Regulation ATS, Regulation NMS, Regulation SHO and the SEC’s Market Access Rule, to the extent… Continue Reading

FINRA Seeks Comment on Fintech Innovation in Broker-Dealer Industry

Posted in Broker-Dealer
On July 30, the Financial Industry Regulatory Authority (FINRA) issued a Special Notice requesting comment on how to continue to foster financial technology (fintech) innovation in the financial services industry. In particular, to support its mission of investor protection and market integrity, FINRA is seeking comment from market participants on how FINRA rules or administrative… Continue Reading

FINRA Seeks Comment on Proposed Amendments to the Membership Application Program Rules

Posted in Broker-Dealer
On July 26, the Financial Industry Regulatory Authority (FINRA) issued a Regulatory Notice requesting comment on a proposal to the NASD Rule 1010 Series (collectively, the “Membership Application Program” rules). The Membership Application Program rules govern how FINRA’s Department of Member Regulation (the Department) reviews new membership applications and continuing membership applications (CMAs). An applicant… Continue Reading

NYSE Proposes to Amend Rule Requiring Registered Broker-Dealers to be Members of FINRA or Another Exchange

Posted in Broker-Dealer
On July 12, the New York Stock Exchange (NYSE) proposed an amendment to NYSE Rule 2, which requires that an NYSE member also be a member of the Financial Industry Regulatory Authority (FINRA) or another registered securities exchange. As a part of the consolidation of the National Association of Securities Dealers and NYSE Regulation to… Continue Reading

FINRA Encourages Firms To Disclose Activities Related to Digital Assets

Posted in Broker-Dealer
On July 6, the Financial Industry Regulatory Authority published Regulatory Notice 18-20, which encourages member firms to promptly notify FINRA if the firm or any of its associated persons or affiliates engages or intends to engage in any activities involving digital assets, such as cryptocurrencies and other virtual coins and tokens. Digital assets activities include… Continue Reading

FINRA Launches Enhanced Public Records Review

Posted in Broker-Dealer
On July 5, the Financial Industry Regulatory Authority announced an enhanced disclosure review process of individuals seeking registration with a brokerage firm. As of July 9, FINRA intends to conduct a public records review of an individual after a Form U4 is submitted for such individual’s registration. FINRA will contact the applicant’s firm within 15… Continue Reading

FINRA Proposes Rule Change Regarding ATS Reporting of Transactions to TRACE

Posted in Broker-Dealer
The Financial Industry Regulatory Authority recently filed a proposed rule change with the Securities and Exchange Commission to amend FINRA Rule 6730 regarding transaction reporting. Currently under Rule 6730, US Treasury Securities transactions executed on an alternative trading system (ATS) must be reported to the Transaction Reporting and Compliance Engine (TRACE) by the ATS itself… Continue Reading

FINRA Publishes Information Notice Regarding Enhancements to the Disclosure Review Process Relating to Public Financial Records

Posted in Broker-Dealer
On May 18, the Financial Industry Regulatory Authority (FINRA) published an Information Notice regarding enhancements to FINRA’s disclosure review process (Information Notice). The enhancements will allow member firms to rely on FINRA’s verification process to comply with the requirement to conduct public searches related to bankruptcies, judgments and liens. Beginning on July 9, FINRA will… Continue Reading