FINRA Announced Its 2017 Exam Priorities

According to Robert W. Cook, since becoming the president and CEO of FINRA in August 2017, he has “been engaged in an ongoing ‘listening tour’ meeting with member firms, regulators and investor groups, among others.”  In the cover letter he issued announcing the release of FINRA’s 2017 Regulatory and Examination Priorities Letter, Mr. Cook states that FINRA has already begun implementing a couple of the suggestions received during those meetings.

Specifically, FINRA will start publishing information on certain key findings obtained from their examinations.  They also are working on creating additional compliance resources for member firms and will be introducing a “compliance calendar” and a directory of compliance service providers this year.

In the 2017 Regulatory and Examination Priorities Letter, FINRA outlined its focus areas, which include the following:

  • High-risk and Recidivist Brokers
  • Sales Practices
  • Financial Risks
  • Operational Risks
  • Market Integrity

The letter contains details on the specific topics that pertain to each of the above-referenced areas, which include, among others, monitoring of high-risk brokers, dealing with senior investors, risk management, cybersecurity, custody, best execution, and fixed income surveillance.  The letter also provides information on common weaknesses that FINRA examiners have found in a number of these focus areas.

Chief Compliance Officers should review the letter to determine if any enhancements are needed to current policies, procedures, and/or internal controls surrounding FINRA’s exam focus areas.

If you need assistance with assessing your compliance program to help ensure it meets FINRA’s regulatory requirements and addresses applicable business practices, please give us a call at (619) 278-0020 to schedule a consultation.

Leave a Reply

Your email address will not be published. Required fields are marked *