The Covid-19 Pandemic has affected everyone, forcing many to work from home and causing an increase in the use of virtual environments. With it comes a rise in cyber-attacks, as hackers take advantage of the confusion and peoples lack of preparation to break into company networks, and trick people into revealing sensitive information. This blog post will discuss some of the common areas of deficiencies for firm’s cybersecurity training programs, and a few tips for improving those programs to keep your firm and employees protected.
FINRA Rule 2232 requires firms to provide retail customers with mark-up disclosure (and other related disclosures) for trades in corporate and agency debt securities that firms offset on the same day with other principal trades in the same security. Disclosed mark-ups must be calculated from a security’s Prevailing Market Price (PMP), consistent with FINRA Rule 2121 and applicable FAQ guidance. On April 24, 2020 FINRA released a very valuable FAQ on Fixed Income Mark-up Disclosure with important updates related to disclosure requirements for broker dealers. Broker dealers and their employees are braving a whole new world with various work from home and virtual meeting and operations challenges. FINRA makes updates to the FAQ’s so it is important to check back often for the most up to date information.
Early in the year, FINRA released their 2021 Report on FINRA’s Examination and Risk Monitoring Program, which is designed to inform member firms’ compliance programs by providing annual insights from FINRA’s ongoing regulatory operations.
In this report detailing FINRA’s top priorities for 2021, FINRA addresses 18 regulatory areas which are grouped into 4 categories: (1) Firm Operations, (2) Communications and Sales, (3) Market Integrity, and (4) Financial Management. From these 18 regulatory areas, FINRA highlights 6 that they feel are the most important and affect a large portion of member firms, which are as follows:
As the end of the year approaches, it is a good time to revisit cybersecurity focus points and remind firms and their representatives of potential weaknesses. Cybersecurity is no longer a big firm program. Cyber-attacks occur from one-man shops to multibillion-dollar financial institutions.
For many firms, a remote workforce is now a new reality. Even with many states’ shelter-in-place restrictions lifting, firms are continuing with their work-from-home strategies for the majority of their staff. This transition and the related challenges have forced firms to re-evaluate their current cybersecurity and remote policies and procedures. The following considerations are important to ensure that your remote staff has the tools in place to adhere to regulatory rules, firm procedures, and best practices.
Earlier this month, FINRA hosted a Small Firm Conference Call to discuss updates and implications of COVID-19 (Coronavirus). If you were not able to listen to the call live, a replay recording is available on demand. This recording provides and discusses many highlights noted in FINRA’s FAQs Related to Coronavirus Pandemic.