Guidance

Background

FINRA examines broker-dealers on a regular cycle basis, with firms posing greater risk receiving an examination more frequently. In connection with each of these examinations, FINRA prepares a report—which is available only to the relevant firm—addressing certain aspects of the firm's compliance with securities rules and regulations.

The Cross-Market Equities Supervision: Auto Execution Manipulation report is a tool designed to provide firms feedback on exceptions that were generated based on the firm’s order entry and trading activity in a given surveillance period. The report covers auto execution manipulation.  This report is produced on a monthly basis.

Summary Report

The table below provides a reference description for all of the elements found for Auto Execution Manipulation exceptions identified during the month.  

Background

Since we introduced our FINRA360 initiative, FINRA has taken a series of actions to enhance support for small firms, including providing small firms with tools and resources to help them comply with regulations.

A consistent comment that FINRA has heard is a desire on the part of small firms for a tool to allow them to get answers to general questions that did not rise to a level that required involvement by their Regulatory Coordinator.

Questions and Answers on FINRA’s Eligibility Proceedings for Firms Participating in the Securities and Exchange Commission’s (“SEC” or “Commission”) Share Class Selection Disclosure Initiative (“SCSD Initiative”).

The Web CRD Form BD Timeliness Report Card is a monthly analysis of FINRA firms' ability to meet certain filing obligations. In accordance with FINRA rules, firms are required to submit information related to applicant member and/or affiliate(s). This report displays a firm's performance in submitting certain BD amendment filings in the required time frame.

This targeted educational series is designed specifically for Financial and Operations Principals (FINOPs) and compliance professionals. Each session delivers timely, practical guidance on regulatory updates and operational requirements that directly impact your firm's financial and operational compliance.

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

There are no upcoming webinars at this time.

General

1. Q: Why does FINRA publish the Sanction Guidelines?

A: FINRA publishes the Sanction Guidelines to familiarize member firms and associated persons with the disciplinary sanctions that could result from typical securities industry rule violations.

2. Q: Who develops the sanctions and fines?

Background

FINRA has been actively monitoring financial technology-related (FinTech) developments in the securities industry. A growing number of FinTech firms have been embracing new technologies, pioneering innovative products and developing new client-oriented financial services business models. Many traditional financial service providers are also rethinking their business models, incorporating these technologies and services. As part of the FINRA360 process, FINRA determined that it needed to enhance resources dedicated to this rapidly developing area of the industry.

The Executing Firm 10 Second Compliance Report Card is a monthly status report for trades that another firm reported on behalf of the market participant. The report contains counts of properly modified late trades, late trades that were not modified, and improperly modified trades.  

FINRA Rule 3170 (Tape Recording of Registered Persons by Certain Firms)—commonly referred to as the “Taping Rule”— requires certain firms to install taping systems to record all telephone conversations between their registered persons and existing and potential customers, review those recordings and file reports with FINRA.

Overview

FINRA’s Funding Portal Rules (FP Rules) apply to firms that register with the U.S. Securities and Exchange Commission (SEC) as funding portals pursuant to the SEC’s Regulation Crowdfunding (Reg CF) and that become FINRA FP members.

Background

In response to the March 2017 Special Notice on Engagement issued as part of FINRA360, FINRA received a number of comments and suggestions regarding the effectiveness of communications with and education of firms, including ways in which FINRA could enhance its engagement with member firms. After careful review of the comments and suggestions received, FINRA is taking a number of actions.  

In June 2009, FINRA issued Regulatory Notice 09-31 to remind firms of their sales practice obligations relating to leveraged and inverse exchange-traded funds (ETFs). At the same time, the Investment Industry Regulatory Organization of Canada (IIROC) issued guidance to the Canadian industry that is substantially similar to our Notice. In July we released a compliance podcast concerning the Notice and some of the issues that it raised.

Background

Small firms represent a critical portion of FINRA’s membership and often face regulatory challenges that are unique from their large firm counterparts. In an effort to provide additional compliance education and consistent with the FINRA360 goal of being a more effective regulator, FINRA launched The Small Firm Report in April 2018. The Small Firm Report is a free conference call series hosted by senior FINRA leaders who discuss trending topics, new rules and regulatory guidance and best practices, as well as answer questions from participants.

The Contra Executing Firm 20 Minute Compliance report card is a monthly status report that provides information on transactions in which a firm failed, as the Contra Firm to accept / decline / compare trades within 20 minutes after execution, in apparent violation of FINRA Rules 7230A(b) and/or 7330(b).