You get that call, and your heart drops. You knew that a regulatory exam was on the horizon, but you have put off thinking about it. Now, you are face-to-face with an upcoming FINRA examination, and the panic has set in.
Your firm is beginning to get in the groove since the shelter-in-place orders have been implemented. In the past, you have worked from home on certain days, but the transition to full-time teleworking, homeschooling, and pet sitting has been a challenging reality. Then surprise! You get a call from your regulatory coordinator that FINRA or the SEC has decided to conduct a regulatory exam of your firm starting now.
In the recent “2019 Report on FINRA Examination Findings and Observations,” one of the topics highlighted was the use of digital communications. This can include a wide range of social media, email, text messaging, and various other digital tools. The regulatory requirements pertaining to the usage of digital communications are outlined in Exchange Act Rule 17a-3 and 17a-4 and FINRA Rules 3110(b)(4) and 4510. These rules require procedures pertaining to the usage of these types of communications, as well as the appropriate maintenance of the communications in the form of books and records.
Recently, the Financial Industry Regulatory Authority (“FINRA”) released its 2018 Regulatory and Examination Priorities Letter. The letter details the topics that FINRA will focus on during the 2018 calendar year. Firms should review the letter and use it as a guide in making their compliance programs more robust and audit ready for the next examination cycle. Here, we will discuss a few of the topics that FINRA highlighted. Read More…
The question of who is required to have an active FINRA Series 24 (General Securities Principal) registration is often not as easy to answer as you may think. As a broker-dealer compliance consulting specialist, we encounter this question from seasoned FINRA compliance veterans and new broker-dealers alike.