Guidance

Requirements under NASD Rule 3030 (formerly Article III, Section 43) for investment seminar activities conducted by dually registered persons that charge fees from participants.

Clarification of NASD Notice to Members 94-44 to situations in which a dually registered person maintains discretionary trading authority, determines portfolio changes, and prepares trade instructions for customer accounts and charges the accounts an asset-based fee.

Whether a proposed standby purchase agreement entered into between affiliate of a member and an issuer in connection with a public offering of the issuer's common stock could constitute an option.

Cash rebates issued to pension plan customers with respect to secondary market transactions in outstanding securities (under former Article III, Section 24, now Rule 2740 and IM-2740).

Background

Until mid-2017, FINRA maintained two distinct enforcement teams within the organization—one handling disciplinary actions related to trading-based matters found through our market surveillance and trading examination programs, and the other handling cases referred from other regulatory oversight divisions within FINRA, such as sales practice examinations and our Office of Fraud Detection and Market Intelligence. Through FINRA360, we analyzed stated firm concerns that these dual programs sometimes resulted in duplication of effort and inconsistency of results.

• Best Execution
• Direct Market Access Controls
• Short Sales

The Underwriter Financial Status Report is a monthly report designed to help firms evaluate the timeliness of financial disclosures made to EMMA, for issuances previously brought to market.   

The purpose of this report is to highlights issuances lacking current audited financial filings (LCF) and the lateness of these missing financial filings, based on their anticipated filing time line.

The report offers two alternate views:

Background

Advanced data analytics is a critical function within FINRA and an important component of our efforts to be a risk-based and data-driven organization.⁷ This work, which supports our examination, surveillance and enforcement functions among others, is conducted in a number of areas throughout FINRA, but primarily within Market Regulation Surveillance, Research, Methodology, and Governance (SRMG), the Regulation Operations Advanced Analytics Team (AAT), the Office of the Chief Economist (OCE), and Technology.

Regulatory Obligations

Exchange Act Rule 15c3-3 (Customer Protection Rule) requires firms that maintain custody of customer securities and safeguard customer cash to segregate these assets from the firm’s proprietary business.

The Sales Practice Complaint Report is a quarterly report that displays trends in complaints with Sales Practice problem codes as reported to FINRA pursuant to FINRA Rule 4530. Note: prior to July 1, 2011, this report showed complaints reported pursuant to NASD Rule 3070(c) or NYSE Rule 351(d). For the purposes of the report, Sales Practice Complaints are evaluated against the number of representatives registered with the firm and the sales revenue of the firm.

The Financial Crimes Spotlight is a free webinar series hosted by FINRA’s Financial Intelligence Unit that focuses on how to detect and protect against emerging financial crimes and cyber-related threats and trends. 

These events are open to FINRA member firms only. Participants must provide their firm's broker-dealer number when registering.

Upcoming Webinars

Additional Webinars Coming Soon.

Background

A critical part of the registration process in the securities industry is the background investigation of applicants for registration and the timely and accurate reporting of information to the Central Registration Depository (CRD) system via the Form U4 (Uniform Application for Securities Industry Registration or Transfer).